The Payer Report Card

There are many intangibles to consider before sitting at the table with a payer to negotiate reimbursement. Effectively evaluated and presented, these intangibles can bring a tangible value to your payer negotiations. Further, if you involve your staff in a discussion of these intangibles, not only will you get their buy-in, but you will learn things that may help you during negotiation. My practice uses an informal payer report card that has become a key source of intangible information that we use to good effect when negotiating with payers.

Next to my miter saw and my cordless drill, the payer report card is my favorite tool, and it has been invaluable in payer negotiations. Simply put, the payer report card is a template that is used to rank each of my payers on an “A” to “F” basis; there is a comment field next to each payer’s grade where comments on what is liked/disliked about the payer can be added. I ask each employee - front office, clinical staff, business office, physicians - to rank the payers from his or her perspective. The results are subjective, but irrefutable - your team is letting you know which payers make it easiest, or hardest, to provide good patient care.

You may be surprised at what you learn. I have learned things that cannot be gauged from a fee schedule. Payer X may pay you the same as Payer Y, yet Payer X’s cumbersome authorization processes and high denial rate make them your staff’s least favorite payer, and the most expensive for your practice to work with. If it costs you more to work with Payer X than Payer Y, shouldn’t you be getting better reimbursement from Payer X? Shouldn’t you be asking for more than just a fee schedule increase from Payer X? Absolutely.

I use the payer report card in conjunction with the Physicians PracticePayerView report card. Often, my payer report card complements the findings of PayerView. When it doesn’t, I go with my payer report card since it is a ground-level reflection of what my team is experiencing.

Some hassle factors have a definable dollar value, such as the cost of having an employee on hold for twenty minutes for every authorization from Payer X. If it costs you $7 more to see a Payer X patient in the office, let Payer X know it. Address these hassle factors in your negotiations; your employees will thank you.

I am not above name dropping in payer negotiations… I just don’t use the names. If many employees or key employees of Payer X are our patients, I mention it. If the senior management of large, local employers are our patients, I mention it.

There are a few other measures I have on hand when I negotiate, including:

• The percent of our revenues and patients attributable to the payer - if the numbers are low, I want to be paid well above the average.

• Competitors in the network - if the payer’s options within my specialty are limited, I have an advantage.

• Denial rate - if the payer does not process claims cleanly the first time, most of the time, it is cutting into my margin.

• Days in A/R by payer - if the payer takes longer to pay us than other payers, this will be a point of discussion.

• Pre-authorization hurdles and other hassles - if it makes it harder for my staff or my doctors to provide good, efficient care, it will be a point of discussion.

Knowledge is power. Knowing the good, the bad, and the ugly about your practice’s relationship with its payers strengthens your hand and can give you a new edge at the negotiating table.

Lucien Roberts, III, MHA, FACMPE, is executive director of Neuropsychological Services of Virginia. He also consults with medical groups and health systems in areas such as compliance, physician compensation, negotiation, strategic planning, and billing/collections. He may be reached at lucien.roberts@yahoo.com.