Rehab

Article of the week: How to ensure that you get good value out of your managed care contracts

Rehab Regs, November 2, 2007

 Before attempting to enter into any renegotiating, first analyze your practice and the conditions of the contract. Steffes says you must

  • determine your own cost per visit for delivering the service
  • look at the volume that each individual contract brings in
  • do the math to determine whether you're making money, losing money, or breaking even on each contract
  • update your own fees as needed

"Some practices never increase their fees or do it rarely because they figure nobody pays what they actually charge anyway," says Steffes. "But costs are increasing all the time, and when a payer sees that your fees aren't changing, it doesn't see a reason for its reimbursement rates to change."

 

Revisit patient office visits

 

When you originally negotiated your managed care contract, you might not have fully known what kinds of patients you'd see regularly and what kinds of treatment they'd need. But after a year or more, you should have a much better idea of how you treat patients who fall under a certain contract.

 

"If a contract calls for three visits a week and you're consistently doing four without getting fully reimbursed, you're not properly managing the care," says Steffes. "You can either negotiate more visits with the contract or with the patient."

 

To get the payer to change the allowable number of visits, you'll have to show that many patients exceed the limit. Even if you do show this, sometimes the payer will not extend the contract or the employer will restrict how many visits it purchases.

 

That's when it becomes important to speak with individual patients. For example, if a plan covers only six visits a year and you believe that the pa-tient needs eight, talk to him or her about out-of-pocket payment. If after a few visits, the patient thinks your treatment is working, he or she may not have a problem paying for a couple of extra visits.

 

"Practices that don't consider negotiating cash payments are really limiting themselves," says Steffes. "As long as you get a patient to sign off on the extra visits, it's a good way to boost business." You also may have to negotiate with patients if the contract doesn't cover certain services, such as iontophoresis.

 

The gift of gab

 

The time for renegotiating rates within your managed care contract shouldn't be the first occasion on which you've spoken with the contract representative since you initially signed the contract. Check in with your contact on a fairly regular basis, even if it's just to ask a quick question or to thank him or her for resolving a difficult account.

 

You also can help your case by submitting good, clean claims in a timely fashion and sending updates on new specialties. If the managed care network knows and trusts you and believes that you are good for its business, you'll be in a much better position when it comes time to renegotiate.

 

Know your numbers

 

When you determine the right time to renegotiate a contract, your best friend in the process will be statistics to back you up. Find out what other providers are doing with their rates and what the market is for rate increases. Check your local paper to see how much the nearest hospital system has increased its rate and how much insurance premiums have risen in a given year.

 

"You should be very diligent about checking healthcare news," says Steffes. "If you can show how much PT salaries rose, give exact market increases, and show a rise in costs, you'll have a better starting point in negotiations." The bottom line: Keep your rates updated through inflation and all of the other increased costs of treating patients.

 

Be creative

 

In addition to renegotiating your rates and visit limits, also consider incorporating a tier system that gives patients an incentive to select you as their therapist or the managed care network an incentive to recommend you.

 

For example, because hospitals often charge more money for services such as evaluations--yet the patient pays the same copay at the hospital or private practice--try to renegotiate the contract to make the copay at your facility less.

 

Also try to create an incentive plan for the managed care network, in which you provide rebates if they send a certain number of referrals your way.

 

For example, if you normally see 100 patients from the contract but instead receive 125, you'll discount the plan. "Basically, you want to go in with concrete ideas and hit them with numbers," says Steffes. "Show them clinical outcomes that show that their enrollees are satisfied with your services."

 

Managed care networks want to see the numbers and dollars that prove you're a cost-effective option, and if you show them you have good relationships with physicians, patients, and large employer groups in the area, that will make you even more indispensable.

 

 

 

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