Ending The Provider Payor Relationship

Posted by medpro | Posted in Provider Contracting, Provider Enrollment | Posted on 25-02-2011


Sometimes relationships, either personal and public, just don’t work out. The provider/ payor relationship is no exception. All that hard work done during the provider enrollment process has gone for naught. According to a survey conducted last year by the Medical Group Management Association more than half the medical practices surveyed said they were renegotiating or eliminating payors they had identified as problematic. Which was, by the way, a significant increase from the year before. The primary rationale used to label them a problem were: reimbursement fees were too low or their policy/procedures simply were not worth the hassle (I suppose just another way of saying their fees were too low).

But one needs to ask oneself when faced with a breakup …what exactly is “too low”. Many times the the definition of “too low” and the subsequent decision to drop an insurer has a heavy emotional content and hard fast number analysis takes a back seat. A problem occurred or the provider was unhappy with how the payor approached a particular issue can drastically alter the definition of what exactly “too low” means. So rule number one when faced with drop/keep decision is…this is a business decision and needs to be approached calmly and methodically using numbers not emotions to guide you through the process.

So what is the process? Step number one is to conduct a payor assessment. This entails comparing your targeted problem payor with others similar sized payors you’ve a relationship. It’s an assessment that should include input from all those staff members who deal with the payors on a frequent/regular basis. Some questions you need to address are:

  • What are the reimbursement rates and how do they compare with other payors?
  • What does the insurer pay versus what you billed?
  • How long does it take to get paid?
  • What is the denial rate and how does it compare with others?
  • How does the preauthorization procedure and frequency compare with other payors?
  • Are there any issues that make this particular payor more difficult to deal with?

The key here is to convert the answers to these questions into actual dollars and cents. For example, if it takes an extra 30 days to get paid, you need to calculate the actual carrying costs associated with those additional 30 days. Lay out a comparison chart of all your providers. It will quickly become clear where the relationship problems lay and the financial impact on the practice. (It may also uncover problems you didn’t know you had).

The next set it to look at the number of patients/revenue that would be affected by dropping an identified problem payor. The logic to apply here is, you wouldn’t want to drop a payor that represents a large percentage of your clients/revenue even if they were a problem. The large firms in your area like Aetna and Cigna are pretty much exempt from this exercise. Experts agree that 15% is a good dividing line. If a payor represents more than 15% of your client/revenue it may be difficult to make up the loss in a relatively short period of time.

OK you’ve identified a problem payor and it doesn’t represent a signification part of your business, what’s next. The best thing is to dig out the contract and examine two sections. The first is the termination clause. Most contacts require that a simple termination notification be sent and after a waiting period the relationship is ended. But there may be other issues involved, timing or the format that the letter must take, for example. The second is the grievance procedure. Before parting ways, you may want to discuss the issues you’ve uncovered during your analysis with the insurer. They may offer to rectify the problems or to adjust the fee schedule. If you do enter discussions be sure to come armed with facts and figures not opinions and anecdotes. Finally, don’t be acrimonious, demanding or threatening during the discussions. Even though you may end the relationship now, there’s a good chance you’ll find yourself dealing with them again in the future. Perhaps even going through the provider enrollment process all over again. So keep it pleasant and professional.

In the next post we’ll discuss the procedures you need to follow once you’ve made that fateful decision to terminate a relationship.


Survey of Provider Enrollment Issues

Posted by admin | Posted in Credentialing, Provider Enrollment | Posted on 09-11-2010


The Medical Group Management Association (MGMA) recently conducted a survey to ascertain it’s members satisfaction levels with their interactions with key payer. The survey included a review of the seven largest payers including Medicare Part B, CIGNA, Aetna, Coventry, Humana, Anthem and UnitedHealthcare. The MGMA membership is exclusively composed of persons serving in practice management roles. The relationship areas survived included: payer communications, provider enrollment, payment policies, system transparency and overall satisfaction levels.

In general, the results indicated that the MGMA membership is most satisfied with the disclosure of payer fee and fee schedules along with the prompt payment of claims and the standardization and transparency of admin procedures. Medicare Pat B achieved the highest score in the first two categories.

The areas of greatest dissatisfaction were credentialing and contracting, siting it’s complexity and time consuming nature. The membership was universally dissatisfied with the contract negotiation process with all payers, indicating that, in their opinion, their practices were at a distinct disadvantage and the payers didn’t conduct good-faith negotiations. Overall CIGNA ranked first and Medicare Part B last on general contracting and credentialing issues. Physician rating system and/or pay-for performance program transparency and the claims denial process were two other areas where virtually all the payers were found to be deficient.

The top to bottom scores (on a scale of 1-5)and rankings of the payers are as follows:

Ranking/ Payer/ Score

  1. Medicare Part B /3.4
  2. CIGNA/ 3.1
  3. Aetna /3.0
  4. Coventry / 3.0
  5. Humana /2.9
  6. Anthem/ 2.9
  7. UnitedHealthcare / 2.6

It’s the hope of the MGMA that in conducting these satisfaction surveys the payer will review their performance and ranking and make the necessary policy and procedural modifications to achieve higher scores especially in the area of provider enrollment.

Welcome to The Provider Enrollment Digest

Posted by medpro | Posted in Credentialing, Medical Contracting, Physician Credentialing, Physician Review, Provider Contracting, Provider Enrollment | Posted on 18-10-2010


Welcome to a blog created to furnish a venue for interested parties to exchange information, news and notes about what can sometimes be an overwhelming subject…. Provider Enrollment…. That is getting all manner health care providers credentialed and contracted with the dizzying array of insurance entities. A list of which runs the gamut from Medicare/Medicaid oriented government entities to the large commercial firms like Aetna, Cigna, Blue Cross/Blue Shield, Humana and UnitedHealthcare to a plethora of HMO’s and PPO’s and all manner of organizations in between.

For anyone who has attempted to undertake a contracting or credentialing effort they know what an complex, frustrating and time consuming activity it can be. Each insurance entity has it’s own unique network needs, processes and procedures. Some make it simple and easy and have excellent network management representatives while others make it a bit more difficult. Add the possible variations  together and you end up with a mind boggling amount of work, time, phone calls and, not too infrequently, frustration. Not for the faint of heart.

What we hope to accomplish is to provide you with general data and information that you’ll find helpful and relevant to and during the provider enrollment process. It addition we hope to offer you info and insights that will help enhance the interface with your own payor universe.

I’m sure we don’t have to tell you that the healthcare industry in a state of flux. As a consequence it has never been more important to insure that your relationship with the public and private payor community is strong and clear.  All of that begins with the proper approach to contracting and credentialing.  So come on along. Bookmark this site or subscribe to the RSS feed, contribute to the comments page, contact us with questions or topic suggestions. The fog of confusions is only dispersed by information and dialogue.