Most medical practices depend on insurance reimbursements for a majority of their income which is why you should view your payors as key partners in helping you to grow your business. In fact, a solid relationship with your payors is essential to the smooth operation and profitability of your practice. Below are three common times during the operation of your practice when you should consider adding new payors.
Launching your practice
Of course, the very first time that you should add a payor partner is when you open your practice.
“Quite frequently, when a physician completes his or her residency, they rely on other individuals to give them recommendations,” notes Ewa Matuszewski, CEO of MedNetOne Health Solutions in Rochester, MI. “But you should also try to develop some type of relationship on your own with a payor if you plan to get into a private practice.”
Faith Lester, an independent healthcare consultant who works in Nashville, TN, agrees with that assessment and says that it is also important to gauge the market in your specialty.
“A practice should diversify its payor mix so it is not heavy in any demographic or particular carrier,” she says.
Since there is always strength in numbers, Matuszewski suggests contacting your state medical society to see if there are any organizations that physician can join to enhance their ability to negotiate with payors.
“Here in Michigan, the strength lies in the physician organizations,” she says. “Physicians here has rallied around physician organizations that serves as their advocate and does the negotiating for them.”
Matuszewski adds that you can rely on physician organizations taking your concerns to the payor or a representative of that payor.
“That’s a wonderful way of approaching it because you may not be the only practice with that concern or complaint,” she says. “It’s easier for these physician organizations to go a payor and let them know that they have 20 other practices in the group who have noticed a dramatic decrease in reimbursement.”
Expanding your base to current patients
Existing medical practices should be sure to diversity its payor mix with patients as well.
“If you operate an existing practice, you should consider exploring new payors to provide a wider base for your patients,” says Lester.
For Matuszewski, it’s a good practice to survey your patient population to see who belongs to which health insurance.
“Spend time researching the various types of payors in your community because you want to take a look at your current payor blend and then see how many patients you have as well as how many of them are in the Medicare sector versus Medicare,” she says.
Matuszewski says it’s also important to make sure to examine your current specialties and whether your current payor mix fits with those specialties.
“While it’s important to ensure that your payors already contract with your affiliated hospital, be sure that they are also contracted with ancillary services such as rehab facilities, skilled nursing facilities, speech therapy, occupational therapy, and other homecare needs. You should be looking at more than just whether your affiliated hospital is contracted with a payor.”
Dropping poorly rated payors
Do you know how well rated each of your payors are? Matuszewski recommends that you occasionally check on health insurance plan rankings through places such as the National Committee for Quality Assurance (NCQA).
“First, be sure they are accredited,” she says. “Then not only examine their rating on an annual basis, but also find out what type of support that plan provides to your practice.”
Matuszewski also likes to know if a health plan is doing a good job in tracking its population—how engaged are they in quality improvement strategies and how engaged are they in maintaining and supporting models of care such as a patient-centered medical home.
“Are they moving in the direction of compensating for quality or are they sticking with the paper performance program that many continue to rely on as an attraction for that physician?” she says.
According to Lester, some other signs that it’s time for your practice to add new payors include:
- Your current payors are making it difficult for your practice to obtain reimbursement
- Your payor routinely denies claims without merit or substance
- Their prior authorization or referral process is cumbersome or time consuming to your staff
- Payor requires additional overhead in staffing to manage authorizations and referrals
“Your staff should know all the resources available to them to make the service to reimbursement process simple and non-complex,” she says. “Otherwise, you may want to start looking for a new payor.”
Finally, Lester says communication between the payor and practice is vital so it doesn’t get to the point where you need to constantly look for new payors. You want to sit down with your field rep to outline what your concerns are and map out your strategy and then follow through.
“Meet with your payors twice per year at least, more if it is warranted,” Lester says. “Bring examples of EOBs if there are issues with reimbursement and discuss with them what problems are occurring at the practice.”