Between government payer levels that are written into the law and commercial payer rates that are outlined in contracts, knowing what your medical group practice will receive for billed services should be simple, right?
But most practice administrators looking at their revenue streams know that gaps can emerge between those supposedly firm reimbursement rates and what is paid to the practice.
An April 3 MGMA Stat poll with 796 applicable responses asked how often practice leaders compare reimbursement to contracted payment rates. The results: No single method stood out among respondents. Nearly one in four respondents (24%) check daily, while 17% opt for a monthly comparison and 19% check quarterly. Another 24% responded other — many of them noting they do an annual review — and the remaining 16% were unsure of the timeframe, yet believe their billing office completes a review.
Many respondents who check daily have a lot in common with a handful of respondents in the other category: They both say they load payer contracts and fee schedules into their EHR or practice management system to identify payment discrepancies, which produce a variance report or alert for the practice. In this instance, they are receiving real-time information from an accounts receivable (A/R) system. Others said they instruct their billing staff to make a note of an explanation of benefits posting with the full amount allowed.
Some respondents said they run a report for payments both over and under the fee schedule. One respondent whose practice operates via a quarterly review said that some payers with “a history of incorrect reimbursements” will be reviewed more frequently than others.
It is crucial that your fee schedule is updated with the correct rates and loaded into your billing software so that these reviews can be done with the correct information. If you do not have an EHR system that allows for ease of analysis, spreadsheet software can be used.
One of the first steps necessary to compare your actual reimbursement to contracted payment rates is to build an inventory of all your fully executed payer contracts, as well as any addenda or amendments made and their effective dates, according to Penny Noyes, CHC, president, Health Business Navigators, Bowling Green, Ky., who recently spoke about payer contracting best practices at MGMA18 | The Financial Conference in Orlando, Fla.
Frequent review of your reimbursement rates with your contracted payment rates will help you collect what you are contracted to collect, reduce unnecessary loss and provide the information you need to answer the following questions:
- Are fee schedules loaded correctly in EHR or other billing software?
- Have there been changes in contracted rates that you were not aware of?
- Are front-end processes such as patient registration correct?
- Are payers cascading their allowable amounts?
- Is your claims submission working correctly?
