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48 – Annual Tasks: Payer contract review
8 Plays17 days ago
The third task that you should complete annually is reviewing payer contracts.
View the full report online: https://www.hstpathways.com/resources/surgery-center-industry-report/
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Transcript
Importance of Annual Contract Review
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The third task that you should complete annually is reviewing payer contracts. Payer contracts are arguably at the center of the revenue cycle process. These contracts, which determine reimbursement rates and terms for services rendered, significantly influence a surgery center's financial health and viability.
Impact of Contract Reviews on Operations
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An annual review and potential renegotiation of these contracts enables centers to ensure that they receive fair compensation for their services, adapt to changing market conditions, and continue to offer top-tier care to patients.
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Beyond financial implications, these contracts also impact operational protocols, patient access, and the center's relationship with insurance
Analyzing Contract Performance
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providers. To get the best possible rates, your financial team must analyze and track the performance of your current contracts in real-world scenarios to determine if they are meeting expectations.
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Gathering external intel such as industry standards, reimbursement trends, and regional benchmarks will help to understand where your contracts stand in the larger market.
Building Relationships with Payers
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Lastly, there is still a benefit to cultivating a rapport with payer representatives, which can lead to more collaborative and transparent negotiations, so make sure to put a little extra time into building those relationships.
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Next, let's walk through the key process steps for this phase.
Steps in Contract Negotiation
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Step 1. Begin by collecting all current payer contracts and organizing them for review. Step 2. Evaluate the performance of each contract by looking at reimbursements, denials, delays, etc. Step 3. Investigate current industry standards and reimbursement rates, especially for similar procedures and in comparable regions. Step 4. Determine what you aim to achieve with the renegotiation, whether it's higher reimbursement rates, better terms, or other specific goals.
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Step 5. Reach out to payer representatives to initiate the renegotiation process. Express your concerns, present your data, and share your objectives. Step 6. Before finalizing, have the renegotiated contract reviewed by legal counsel to ensure its terms are clear, enforceable, and in the center's best interests.
Post-Agreement Actions and KPI Tracking
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Step 7. Once both parties agree and the contract is signed, communicate the new terms to all relevant staff members and update any systems or processes as necessary.
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The following key performance indicators will help you track your success. Time spent, percent renewed versus canceled, and percent of change in fees.