Comparing Commercial Payers

October 1, 2008

I’m trying to figure out if our reimbursement rate fee schedule from our various insurance carriers is too low and if so, what can we do about it.

 

Question: I’m trying to figure out if our reimbursement rate fee schedule from our various insurance carriers is too low and if so, what can we do about it.

I’ve done an analysis to compare our reimbursements for each of the insurances we carry with what Medicare pays. How can we figure out what the going rate should be? What do these carriers pay male physicians vs. female physicians (and is there discrimination going on)? If we’re being underpaid, how can we get the insurance carriers to increase their fee schedules? My wife sees about 60 to 70 patients per week and we’re barely making ends meet. How can we increase our reimbursements?
 

Answer: It’s a big question. Rates are private.

However, Physicians Practice does publish some aggregated, aged data. See our January 2008 article “Tired of Being at the Mercy of Tight-fisted Payers?

As for gender discrimination, there really isn’t any - just physician discrimination. A couple ideas to tackle the problem:

  • Make sure the rates you’re actually getting are the rates you contracted for. Usually, contracts are written to provide a percentage of Medicare’s rates in a given year. Payers are big organizations with technology problems, so what they pay isn’t always what they contracted to pay. So start there.

 

 

  • If you have bad contracts, analyze which contracts you can drop. Look at your worst payers (in terms of rate and pain of collection) and at what percentage of your patient panel is with that payer/plan. If you have payers that stink and only a small percentage of patients use this insurance, then it’s a no-brainer - drop the payer. You sure can try to negotiate with payers, especially if you know your end game (i.e., would you drop them if they don’t negotiate?).

Start just by asking for more come contract renewal time. It would be helpful to point out (likely in a letter unless you can actually get to a payer rep) that their rates are below those of other payers or that you offer something unique (e.g., you take care of most of the teachers in a 20-mile radius, and you’d hate to see the payer lose its contract with the teacher’s union. Or, failing a scenario like that, prove your high-quality expertise.)