Racheal Feeback 3 tips for optimizing payor contracts

3 tips for optimizing payor contracts

While home health agencies are no strangers to payor contracts, many fail to understand the impact these agreements can have on billing processes and bottom lines.

Home health providers must consider the potential financial losses that can be caused by aged AR, write-offs from unresolved denials, unsupported contractual adjustments, and underpaid claims.

In this blog, we explore three ways to optimize payor contracts.

1. Review and understand your payor contracts

It may seem obvious, but understanding even the simplest terms of the contract is critical to ensuring the contact information is correct in your EHR and that your latest rates are accurate. These terms include termination, filing deadlines and recoupments, reimbursement rates, and more.

2. Utilize technology to analyze cost

Cost analysis is key when working toward optimizing payor contracts. The right technology can provide consistent monitoring to help ensure you are getting paid what you expect based on the contract. This includes tracking payment variances, helping ensure timely payments, and reviewing for accuracy and data errors.

Keep in mind that it’s important to review your EHR software solution for payor setup and payor mix data. This means making sure your payor setup is correct based on the contract, reviewing authorization requirements, denials, appeals, timely filing guidelines, contract details and billing rules, and rating each payor’s “hassle factor” (their level of administrative burden).

For those using a data-insights and forecasting solution, like Inovalon, be sure to review how long it takes to get payment from your payors. What is your denial rate? What were your charges-to-payment ratios for last year? Understand what a rate change would do for your business’ bottom line and identify appropriate rate increase requests for each payor.

Here are some questions to keep in mind during cost analysis:

  • What does it cost you to deliver services and what are you getting paid for those services?
  • Are you billing based on usual and customary rates? What are your competitors being paid for the same service?

3. Foster the payor-provider relationship

Providers should develop a friendly relationship with their payors, as communication and collaboration are important for understanding:

  • Authorization processes and required documentation
  • Appeals processes
  • Timely filing requirements

The payor-provider relationship is hopefully a long-term partnership. Use your data intelligence gained from cost analysis to initiate negotiations and keep that relationship growing and evolving. Also be sure to review contracts on a yearly basis and connect with provider representatives if you have any unresolved issues with claims. 

Connect with us today to learn how our innovative tools can help your agency optimize payor contracts and maximize operating margins.

Rachael Feeback

Rachael is an accomplished accountant with over 15 years of experience in the healthcare and software industries. She started her career as an Accounting Manager on the Provider side and later specialized in EMR healthcare technology services, driving process improvements for home health and hospices. Rachael’s passion for healthcare lies in her commitment to taking care of the smallest details, enabling care teams to provide exceptional patient care. She has a track record of leading high-profile clients with compassion and expertise. Rachael holds a Bachelor of Arts in Accounting with a minor in Global Studies from Drury University, Springfield, MO. She resides in Rogersville, MO, with her husband, Mark, and their daughter, Taellor.

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