Bring physician advisors’ input to payer contracts

Wednesday, July 31, 2019

Payer contract terms have far-reaching consequences, from the types of services covered and the documentation required to how appeals are negotiated. But too often provider organizations don’t bring input on contract performance from all key stakeholders to the negotiating table or don’t have anyone placed to interpret and aggregate the feedback from various departments. That means key questions are left unaddressed, and the organization won’t be aware of issues until it’s too late and revenue integrity is struggling to patch together a solution.

As part of the revenue integrity team, physician advisors (PA) can be key resources during contract reviews and negotiations. With their clinical and financial regulatory backgrounds and relationships with payer medical directors, PAs offer input that will steer their organizations toward a fair and satisfactory contract.

“When it comes to looking at terms and having these discussions, it can elevate the discussions beyond the contract staff to the payer medical director and the PA where they’re truly talking about the clinical needs of the patient and what are the rules for this payer around utilization or what is an inpatient,” says Elizabeth Lamkin, MHA, CEO and partner of PACE Healthcare Consulting, LLC, in Bluffton, South Carolina.

Contracts are legal documents, but they revolve around patient care and how that care is approved and delivered, Lamkin points out. When a PA and the payer’s medical director engage in peer-to-peer discussions on topics such as authorization during contract negotiations, that can result in clearer terms that may ease many common authorization headaches. In some instances, the PA can discuss specific cases during negotiations, engaging the medical director in clinical conversations, and may be able to obtain authorization for those specific patients and procedures in advance.

Payer contracts often include boilerplate language and terms developed by the payer. That one-size-fits-all approach may work for the payer but might not benefit the provider organization.

“It’s really easy to have a payer come in and accept their contractual language on readmission policies or appeals policies or utilization review policies,” says Lisa Banker, MD, FACP, CCS, CCDS, chief medical advisor, value analysis and revenue integrity, at CarolinaEast Health System in New Bern, North Carolina.

Interpreting contract language regarding readmission policies, for example, can be tricky and it may be challenging for contracting staff to understand how the payer’s terms play out in real clinical scenarios. For example, when discussing a payer readmission policy, it’s critical to have a clinical perspective to ensure that the policy only applies to patients who are readmitted for the same condition as their initial admission, Banker says.

“If they came in for pneumonia yesterday and they break their leg tomorrow in a car accident, we’re not getting inappropriately dinged for a readmission because we have language in there that’s too expansive,” Banker says.

Contracting has historically been a guarded area, Banker says. That may not be unwarranted: contract terms can include sensitive business information that the contracting parties are typically not allowed to discuss with outside organizations. But staff within the provider organization don’t always need to be subject to that prohibition.

“You should be able to open the doors to some of those PAs and get some really valuable help without necessarily selling your industry secrets,” Banker says. “They don’t have to know all the financial rates and things, but you can get some really valuable input and data and knowledge from them.”

As the push for hospital price transparency continues, organizations must be prepared to negotiate contract terms they can stand by. Price estimate tools, sound pricing strategies, and scrutiny of contract terms and performance will require close collaboration between revenue integrity staff and colleagues such as PAs.

Editor’s note: For more on collaborating with PAs, see the April issue of the NAHRI Journal, and to read more on price transparency, see the July issue of the NAHRI Journal. To learn more about hospital pricing strategies and price transparency, register for the 2019 Revenue Integrity Symposium (RIS) (October 15–16) and attend the session “Pricing Hospital Services: Anything but Transparent” presented by Dapo Akanbi, MBA, NAHRI Advisory Board member Valerie A. Rinkle, MPA, CHRI, and NAHRI Advisory Board member John D. Settlemyer, MBA, MHA, CPC. Also at RIS, Caroline Rader Znaniec, MBA, MS-HCA will be presenting the session “Seeing Through Pricing Transparency.”

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