Efficient Monitoring of Managed Care Contracts

Ongoing monitoring of managed care contracts is essential to ensuring appropriate reimbursement.

By John Montaine CEO, Creative Managed Care Solutions, LLC and George Kelley, COO, CBIZ KA Consulting Services, LLC

Managed care payers are constantly making changes to contract terms, whether it be their fee schedules, drug prices, how they interpret contractual language, or full-scale policy changes. As a result, hospitals and health systems must remain vigilant in ensuring that they are being reimbursed correctly and competitively by their managed care payers. Here are a few questions to consider:

• Are resources being assigned in your hospital or health system to track and implement all of these changes to make sure internal systems are updated in a timely manner?
• Is your managed care reimbursement being tracked on a consistent enough basis to ensure that your payers are providing appropriate reimbursement and that there are no gaps, lags or discrepancies?
• Can you easily determine if your claims payments are similar to like providers?
• Do your contract management tools provide the timely reporting necessary to prevent revenue erosion?

Monitoring managed care contract changes can have a profound effect on the revenue cycle. The process can affect denial and write-off reductions, increase patient responsibility collection percentages, and improve the effectiveness of your charge and payment levels, as well as the timeliness of reimbursement.

Health systems often fall behind in maintaining updated reimbursement schedules in their contract management system. This leads to an increase in denials, write-offs and countless hours of communication between providers and payers in hopes of salvaging appropriate reimbursement.

For revenue cycle professionals, there are specific reports that can provide an early warning system for identifying changes in managed care reimbursement. These reports can provide a validation that your organization has implemented policy, pricing and reimbursement schedule changes without necessarily needing to dig into every line of your contract management system.

• Denial reports
• Carve-out payment reports
• Payment benchmark reports
• Payment time distribution reports
• Patient responsibility reports

With these reports, your revenue cycle team can make key decisions that will lead to improved reimbursement and reduced revenue leakage. When planning for potential next steps, you need to ask the following questions: Do internal resources need to be added to ensure that contract changes are updated on a timelier basis? How have margins been affected? Do charge levels need to be adjusted? And finally, are there areas of your contracts that need to be renegotiated?

CBIZ offers a variety of managed care contracting services, from reporting to modeling to payer negotiation. For addition information about our services, please contact our office at 609-918-0990 or kaconsults@cbiz.com.

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