Tools to Challenge Payer Collaboration on Contracts

More and more provider organizations are beginning to incorporate contract language that protects their revenue streams. When facing payer consolidation and collaboration, consider these tips to make sure you continue to receive the full value of contracts you have already negotiated.

1. Remember all redistribution: Account for any redistribution of the market share impact on the hospital's revenue stream from mergers, acquisitions, and joint ventures, and prevent potential silent PPO activity
2. Consider the effects of grouping services: Quantify the effect of consolidation by type of service(e.g., medical/surgical, centers of excellence, transplant services, behavioral health services, and ancillary services) and by product line.
3. Add up your administrative costs: Account for administrative costs associated with changes in billing policies and procedures, full-time equivalent (FTE) allocation for billing and collections, FTE allocation for pre-registration and authorizations, and training and education .
4. Discourage selective contracting: Prevent selective contracting to ensure that the hospital continues to be included in payer networks for all services at previously determined reimbursement rates, and negotiate revenue-neutral adjustments for any services (e.g., transplant and other designated centers of excellence, behavioral health, and lab) that are redirected to select networks as a result of the payer collaboration.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.