Do you know what percentage of your practice’s patients are self-pay? How many of your patients have private insurance? And of those who have private insurance, do you know what percentage of that group has a high-deductible plan? If you know who your largest payers are, are you in tune with news about their coverage and reimbursement practices?
Knowing your payer mix, and staying informed about private and public payers are important in understanding where your practice stands today, and where it’s going in the future.
Current Trends in Public and Private Coverage
For the millions of Americans who are insured, the amount of public versus private health coverage is seemingly drastic. As of 2016, 36.2 percent of Americans have public coverage while a whopping 63.8 percent have private coverage. Additionally, new data from the Gallup-Healthways Well-Being Index shows a noticeable increase in the rate of insured Americans since 2013.
As the public sector slowly grows year after year, it’s important to become aware of significant changes on the horizon for the private sector as well. Two mergers are currently in effect: the Anthem and Cigna merger and the Aetna and Humana merger. If approved, this would reduce the five commercial payers to just three, United Healthcare being the other. According to PricewaterhouseCoopers, 2016 is the “year of merger mania,” shifting payments to a more patient- focused responsibility.
Staying up to date on these possible mergers and other trends is key to understanding where your practice stands. For example, if you already have a large number of Anthem and Cigna patients, this merger can give you increased leverage in negotiating contracts.
Understanding Your Payer Mix to Increase Cash Flow
As you know, depending on payer contracts, the same procedure can be reimbursed at a different rate and speed. A practice with a payer mix shifted in favor of private payers will collect reimbursement at a higher and faster rate than a payer mix shifted in favor of public payers. Therefore, your cash flow is affected by the mix of payers your practice is working with, and the amount of time it takes to receive each reimbursement.
When you have a better understanding of the make-up of your payer mix, there are three steps you should take to improve your collection efficiencies:
1. Improve Payer Relations
Starting with the largest commercial payer for your practice, and moving down the list from there, work on improving the relationship between you and your representative. Begin the process of negotiating better future rates for your providers using your current volume as leverage.
2. Market Toward Select Payers
Market towards patients with payers who process claims at a faster rate for your practice by updating your practice information on payer websites. Additionally, it’s important to stay up-to-date with patient reviews on payer websites – addressing negative reviews about your practice as they come up will keep you in good standing with your patients.
3. Optimize Collection Efforts
Align your billing and collection efforts to collect from payers who are easy to work with first. Focus on receiving a faster return today from a key private payer, instead of fighting for a dollar down the road.
Ultimately, understanding your healthcare payer mix is crucial for the success of your practice. Once you identify where your practice stands as a whole, you can take the appropriate steps to make operational changes to address it.