Managing Managed Care

managed care moneyBy: Valerie Shahriari

While your healthcare business may be compliant with billing regulations and coding, this does not mean that your payer is compliant and has paid you correctly per your contract.  Providers know that Fraud and Abuse has been one of the largest areas of focus for payers and the government over the past 20 years.  Due to this attention, many healthcare businesses engage auditors to audit their compliance of claims quarterly or annually.  However, in addition to compliance audits, a provider should be auditing their payer interaction to create a dynamic blueprint of denial management and payment recovery.   The AMA states that a 5% denial rate for an average family practice equates to about $30,000 walking of the door.  A good benchmark for payer compliance would be a denial rate of 5-10%.  Often times, practices and healthcare businesses operate with a much higher rate, and even in the 20-30% range without even knowing it.

When auditing the payer interaction, several components should be included in the review including:

  • Denial rate percentage
  • Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period as an Aggregate
  • Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period by each Payer
  • Claims denied categorized by denial reason as an Aggregate for previous 12 months
  • Claims denied categorized by denial reason by each Payer for previous 12 months
  • Claims that have been appealed, the date submitted, the date of the outcome, the outcome by each Payer
  • Claims not paid according to fee schedule as an Aggregate for previous 12 months
  • Claims not paid according to fee schedule by each Payer for previous 12 months

Once this initial review is complete, you now have a baseline for your payer’s performance.  A monthly dashboard can be developed by your office manager, billing manager or billing company with these components to monitor these metrics now on a monthly basis.  This approach will lend a proactive approach to detect payer problems before they are an epidemic.

Once a payment issue has been identified, disputing this denial or reduction is the next step.  When advocating for providers, I always ask “Help me tell your story”.  To truly advocate, the details of your story need to be documented and include the services denied or reduced, the medical chart that highlights the service that you rendered, the communication with the payer that has occurred both telephonically and written, as well as, any executed contract governing your relationship that may be applicable.

Through proactive detection and thorough documentation supporting the dispute, providers have the ability to manage Managed Care and impact their bottom line.

One thought on “Managing Managed Care

  1. Pingback: Physicians: Starting Preparing for 2016 Changes in Healthcare | Florida Healthcare Law Firm Blog

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