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.
Post-Negotiation Assistance
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.