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Efficient Monitoring of Managed Care Contracts

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 to their fee schedules, drug prices, or how they interpret contractual language to 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 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 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, payment levels, and the timeliness of reimbursement.

We see health systems that 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 the providers and payers in hopes of salvaging appropriate reimbursement. Health systems need a more effective and efficient means to stay on top of these changes.

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 hospital or health system has implemented the 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 interpret the results and make key decisions that will lead to improved reimbursement and reduced revenue leakage. Planning next steps, the following questions need to be asked: 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 and Creative Managed Care Solutions will be talking about how to improve managed care data analysis at the HFMA Western Symposium in Las Vegas from Jan. 12-14. We’ll also be exhibiting throughout the conference at Booth #234. If you’re not attending the conference but would be interested in speaking to us, please contact Adam Abramowitz at aabramowitz@cbiz.com or 609-918-2093 or John Montaine at john@cmcsroi.com or 210-332-7982.

Copyright © 2019, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the expressed written consent of CBIZ.