NAHRI: Optimizing Revenue Integrity by Focusing on Payer Contracts

Andrew StieveJune 3, 2019

Businessmen shaking hands

It’s no secret that one of the most challenging aspects in revenue cycle management is keeping track of the numerous complexities associated with managed care contracts. Getting it right (or missing the opportunity) can greatly impact revenue integrity initiatives and financial performance—both positively and negatively.


By not carefully monitoring payer contracts at every step opens the door for payers to process accounts without thoughtful consideration to the contractual obligation to which they have agreed. 


Despite the risk, many providers are still using manual processes to try to stay afloat among payers’ complicated multi-tiered structures and rules that seem to always be changing. Pricing may be off against competitors in the market, and either direction (too high or too low) poses problems as marketing services and consumer choice become more prevalent. Another unintended and far-reaching result is that the cost to provide services could exceed the reimbursement received, therefore increasing charges. This could unduly put more financial responsibility onto the patient.


When considering your revenue integrity program, a focus on payer contracts can improve your revenue lift and compliance: 


1. Ensure you are keeping up with revenue carveouts in your contracts.

Implement a process to highlight these scenarios and determine the proper revenue code to CPT/HCPCS alignment. There may be situations where your contract specifies certain revenue code assignments that allow for higher reimbursement. Typically filtering charges through a robust set of rules that takes detailed and current payer contract data into account can assist in this endeavor.


2. Ensure the contract is correctly modeled according to the hierarchy of services provided.

Determine a clearly defined process to ensure maintenance of the contracts are completed in a timely manner. This includes reviewing specific account detail information and comparing it to payer payments. 


3. Use contracts to better understand how changes in prices impact reimbursement across all of your payers.

Analyze the gross and net revenue for a price change to validate how the negotiated rate impacts the organization as a whole. Showing a comprehensive view of impact across all payers can aid in contract negotiations to leverage key areas of sensitivity.


4. Gain a national view of payer rates.

Gain the requisite knowledge to seek leverage at the negotiating table to show solid proof as to why the reimbursement should differ from the proposed rate a payer is offering. The reliance on individual market leaders and managed care analysts to determine rates can be a limiting factor. Understanding national market conditions provides improved support as to why the reimbursement should differ from the proposed rate a payer is offering.


5. Look for opportunities related to reimbursement caps.

When reimbursement for a service is more than the total dollars billed, the payer often caps reimbursement to the amount of the total charge. A simple increase in the chargemaster could provide additional reimbursement if it aligns with the overall pricing strategy.


6. Develop a feedback loop that highlights opportunities for correcting payments going forward.

As with many parts of the revenue cycle, identifying root cause of problems is an excellent way to prevent future occurrences. Dealing with payers and payer contracts is no different. 


These steps can bolster the success of any revenue integrity program and ensure more complete payment for services provided. 


R1 Revenue Integrity Solutions leverage advanced technology and analytics, a proprietary rules engine, and extensive project management and healthcare expertise to help providers gain accurate reimbursement for the care provided. Building solid and compliant foundations for pricing, coding and charging while monitoring reimbursements for accuracy is at the core of any revenue integrity initiative. R1 Revenue Integrity Solutions include:


  • Chargemaster Optimization
  • Charge Capture
  • Contract Management and Modeling
  • HIM Coding Reviews
  • Transfer DRG Reviews
  • Payment Variance Analysis
  • Strategic Pricing and Modeling

Author Bio: Andrew Stieve is a Vice President of Revenue Integrity at R1.