How to Best Position Your ASC for Managed Care Contract Negotiation Success
Effective managed care contract negotiation and renegotiation are essential to an ASC's success. A surgery center can do everything right concerning adding surgeons, case selection, hiring staff, investing in equipment, and all the other important decisions that go into setting an ASC up for success, but unless procedures are adequately covered, a center is not likely to have much of a future.
But managed care contract negotiation is tricky. For surgery centers that outsource their revenue cycle management to select ASC billing companies, they may gain access to valuable services that can help in this area: managed care contracting analysis and negotiation support. Some ASC billing companies enhance their ability to deliver these services by leveraging "next-generation analytics," which take an even deeper dive into revenue cycle data, unearthing insights that are either much more time-consuming or even impossible to reveal through legacy reporting platforms.
Effective negotiations, supported by data, can initially secure ASCs strong contracts that generate good profitability on procedures, while regular renegotiations can secure adequate payment increases on covered procedures and coverage of newly added procedures. An ASC billing company that uses and provides a next-generation analytics platform can play key roles in helping clients accomplish these objectives.
Here's what to look for when researching an ASC billing company's ability to support managed care contract negotiation efforts.
Extensive Knowledge of Payers
ASCs should find a billing company that works with surgery centers in their area and nationwide. This experience helps keep the company current on payer contracting trends and tactics. With this knowledge, a billing company will be in a better position to advise clients on how to prepare for contract negotiation and review more effectively.
Understanding Managed Care Contracting Needs
Before going into a managed care contract negotiation or renegotiation, ASCs should know what they need to be paid to ensure the contract they negotiate provides profit for most procedures, with reimbursement coming in above Medicare rates. An ASC billing company should be able to assist clients with determining these target figures by helping perform case costing. Next-generation analytics can provide ASCs with more complete and accurate case costing data.
Negotiations tend to require a little give and take, with the ASC "winning" on some rates and the payer "winning" on others. A billing company, pulling data from its analytics solution, should help its clients examine their revenue in aggregate and better understand the balance that will be deemed acceptable for a negotiated contract.
Gathering Data to Support Negotiating Position
Surgery centers must be prepared to explain — and sometimes demonstrate with clinical and financial data — to payers why procedures are worthy of coverage and should be covered at an appropriate rate. The right ASC billing partner will help produce the data — key performance indicators (KPIs) and detailed financial information captured in an analytics platform — that can strengthen an ASC's negotiating position.
Payers are increasingly interested in contracting with surgery centers. That's the good news. The bad news: Payers are generally not eager to give providers favorable reimbursement rates and terms. If an ASC comes to the negotiating table unprepared or underprepared, it can leave with a managed care contract that limits or may even stifle growth and profitability. That makes it imperative for ASCs to come armed with extensive knowledge and strong data to effectively argue for fair coverage. A good ASC billing company will allocate personnel and resources that help put its clients in the best position for negotiation success.
Analyze Managed Care Contracts
An ASC billing partner should employ experts who can perform detailed analyses of existing managed care contracts. With this information, the billing company should help its clients determine renegotiating goals, including where payment increases would contribute most to growth and what reimbursement figures should be targeted for coverage of new procedures. A good partner will provide clients with the billing data, exported from the next-generation analytics platform, to help determine and argue for these goals.
Key Areas of Focus
While managed care contract negotiations and renegotiations largely focus on coverage and reimbursement rates, the terms of the contract are important as well. A billing company should advise its ASC clients on such critical areas of focus during negotiations and renegotiations. This includes ensuring carve outs of those procedures that are the higher cost and/or performed most frequently to secure higher reimbursement, obtaining adequate coverage of implants, negotiating annual cost-of-living increase to payments, and watching for terms and language concerning issues like timely payments, authorization penalties, and appeal deadlines.
Once managed care contract negotiations are completed, a good ASC billing company will help its surgery center partners properly load the new contracts. After the contract is loaded, the work of the ASC billing company should shift toward ensuring the center remains compliant with the contract terms, gets bills out in a timely manner, and ultimately gets paid what it deserves.
The right ASC billing partner will also hold payers accountable to new contracts by performing outreach to payers when actions, such as slow payments and improper denials, violate the contract (which a next-generation analytics solution should help quickly identify) and spirit of a good surgery center-payer partnership.
The ASC billing company should also take the lead on handling issues of payments coming in below contracted rates (i.e., underpayments) and ensuring an ASC is paid interest due to late payments — claims and requests that will be bolstered by providing payers with supporting data.
Selecting Managed Care Contracting Partners
If an ASC decides to bring in outside expertise to represent and further support the center in managed care negotiations and renegotiations, an experienced billing company should assist here as well. The billing company may be able to make recommendations of firms to consider, help with vetting those firms, and assist with selecting a company.
When a firm is chosen, the ASC billing company can help clients get the managed care contracting firm up to speed on the center's current contracts, provide key facility data captured in the analytics solution, and share potential areas to target for improvement during renegotiations. A good billing partner will extend its partnership with an ASC client to the managed care contracting firm to better ensure close collaboration that further enhances the center's financial performance.
Raising Your Expectations for an ASC Billing Partner
It's essential that surgery centers perform due diligence before choosing an ASC billing partner. Companies vary greatly in the types and quality of services provided. The partner selected should be well equipped with the ASC knowledge, experience, tools, and technology required to provide significant, sustainable revenue cycle improvements in areas including managed care contract negotiation and renegotiation. Knowledge of these processes, paired with next-generation analytics, can help a surgery center take its revenue cycle from good to great.
Revenue cycle greatness should be the goal for all ASCs. The right ASC billing partner can make it achievable.