Managed Care Contract Negotiations
Mar 20

Three tips on testing contract compliance

It is important to test contract compliance with your plans in order to ensure that all rates and terms are being adhered to. Here are three tips to show you how:

1. First, make sure you can differentiate between your commercial payers and then even among products for a particular payer (e.g., BlueCross BlueShield HMO versus BlueCross BlueShield PPO) because each plan has different rates. Capture your data correctly on the front end. The data for each plan should be as specific as possible to make it easier to test for contract compliance. Among the pieces of information you collect, list the payer, product, and revenue, CPT, or HCPCS code. The data should also include what they billed and what they got paid. If there is a denial, include a reason code if you have one.

2. Next, take what they actually paid you and compare that to your fee schedule, which, if you can put it into an electronic format, will make things a lot easier on you. Get your fee schedule in the database, put your claims in a database, compare the two, and then investigate the variances.

3. If you have annual inflaters in your contract, then it is critical to complete contract compliance testing. As soon as those inflators kick in, providers should confirm that the terms of the contract took effect. This can be done on a sample basis. If you don’t hold payers accountable, they might just overlook loading your inflator into their system.

Note that contract compliance should be conducted on a quarterly basis. By looking at this quarterly, you can catch any changes in coding edits or bundling procedures..

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →