And yes, you’re trying to make a living, but your first priority is to your patients. Compare this with an insurance company, which must answer to its stockholders. Sound wrong? To many people it does, “unless you put your business hat on,” says Nick Fabrizio, a Medical Group Management Association senior consultant. “They’re taking advantage of the market.”
Juliet Breeze, a part-time family practitioner and CEO of Partners in Practice, a Richmond, Texas-based practice management consulting firm, concurs. She even admits a grudging respect: “Insurance companies are worthy adversaries. They have very good strategies.”
Insurance companies employ many ways to increase their profit margins by playing around with operating income. They lower their “medical loss ratios” — industry-speak for what an insurance company pays out in reimbursements to physicians — bundle procedures, and put protocols in place as barriers to care (e.g., preauthorization). “If it takes 30 to 45 days for physicians to catch on, you’re saving millions,” says Madden, who even worked for UnitedHealth for nine months. It’s these little erosions that add up to big, big losses for physicians, she says. “There are initiatives put into place that target small-dollar areas.”
Whaddaya know?
Prevailing foggy perceptions by physicians also frustrate Madden: “Most physicians are not business people. They want to take care of their patients. I can’t tell you how many ask why they need to know about [payers’] policy changes.” You do need to know about policy changes, and more, if you’re truly interested in bettering your situation. Specifically, you should know:
Your data. Pop quiz: Say you were promised $99 for a 99213 by a payer. Are you actually getting that? Fabrizio says that many physicians would have no idea if asked. Shaving just a couple dollars off this one very common code can cost you tens of thousands of dollars.
You should know your top 20 codes in this intimate fashion. Make yourself an Excel spreadsheet with one row for each payer and your top 20 codes across the top. Track timeliness, denial rate, and whatever else makes sense to you. “Trend each payer. When you do that you can really see what’s happening,” says Breeze. Leverage is being able to jab your finger at some indisputable facts and say, ‘Did you know you deny 20 percent more claims than other payers?’
Breeze also points out that, “A new trend with insurers is to pull out a ‘report card’ on you. … If you know your own data, then if those report cards don’t seem accurate, you’ve got your own data to refute it — a little bit of turning the tables.”
Your costs. This is admittedly easier said than done. “There’s no real relation between reimbursements and cost of delivery of services,” says director of outreach programs for the American Academy of Professional Coders Barbara Cobuzzi. “If I were making widgets, I would know the cost.”
Not so with medical practices; there are just too many variables. Costs include overhead, ancillary personnel, rent, and supplies, to name a few. Hence, the birth of the volume-based practice. “Physicians think they’ll make it up in volume,” she says. “But doing more just means it’s costing you more. You have to get a feel for your costs, even if you SWAG it (Scientific Wild-Ass Guess).”
Who your payer reps are. It’s very important to know this, and to foster relationships with them. “The reason for building that rapport is because nine times out of 10, that’s the only person you’ll deal with,” says Jeff Milburn, during his workshop lecture “Managing Your Payer Contracts” at the 2007 Medical Group Management Association conference in October. And remember, justified or not, these reps take a lot of abuse from providers. “You have to be firm,” says Millburn. “But being nice doesn’t hurt.” Stay calm, politely state the facts, and let your data speak, rather than emotion. This will go much farther than impassioned pleas based on outrage.
Where your contracts are. Administrative turnover can wreak havoc on document organization in a practice. Do you know where your contracts are? They are precious. Store them in one place, and have off-site backups like you would any valuable document. Make sure you have a current contract that is also signed by the payer. How can you dispute the terms if you can’t even prove it’s a ratified contract? And just as you do (or should do) with your insurance policies, archive the last one to two versions. If the payer ever decides to reevaluate your claims for possible revenue “take-back,” you can point to the clause in your old contracts that limits this activity.
The important dates. When are your renewal dates for each of your contracts? What are the requirements for termination? Do you have any evergreen clauses? If so, get those renewal dates in particular into your Outlook calendar or other tickler software, and make sure it conks you in the head in plenty of time to contact the payer to renegotiate. (And make a note to yourself to excise those evergreen clauses for the following year.)
