By Will Love, Director of Denials and Underpayments @Healthrise
Over the previous five decades, the American healthcare system has moved further and further toward a managed care model of reimbursement. Since the year 2000, patient out-of-pocket payments have constituted only 3% of hospital revenue, and hospitals with high volumes of Medicare and Medicaid patients may only collect 1 to 2% of their revenue from patients. Thus, with hospitals dependent on third-party payors for 97%+ of their revenue, quality relationships with managed care payors are imperative.
The core of a hospital’s relationship with a private managed care payor will be defined by a contract. Managed care contracts typically span over a thousand pages and cover topics that include fee schedule rates for inpatient and outpatient services, conditions for “outlier” payments, billing rules, medical necessity provisions, hospital and payor appeals rights, and many other topics. When hospitals and payors reach an impasse, the managed care contract will be used to resolve disputes – even disputes that lead to arbitration or litigation.
However, beyond the contract, a hospital’s revenue cycle team can resolve issues with payors much more quickly and amicably if the two parties have a sincere relationship built on trust and accountability. Below are tips for building quality relationships with managed care payors:
Get to know your payor reps
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- A contracted payor will often assign one to four reps to serve as liaisons between the payor and hospital. One or more of the reps may be dedicated to assisting with patient and claim escalations while other reps are assigned to a high-level director-level role.
- While it is unnecessary to be friends with your payor reps, getting to know them can add a softer, human touch to your interactions. Humor and shared connections are often welcomed and memorable relief during meetings and escalations that are tense and laborious.
Respect your mutually agreed-upon process
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- Payor reps are often assigned to multiple hospitals and rarely does a hospital reach out to them unless there is a problem. Persistence is often key with payors, but hospitals should respect the pathways of the escalation process.
- For example, a disputed claim should usually be escalated to a claims center and a supervisor before raising with your payor rep by email or claims meeting.
- If a payor rep believes you are escalating minute issues to them, they are less likely to respond when you truly have an immediate need.
Remember the relationship goes both ways
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- Per their contract, payors often have auditing and recoupment rights. If a payor rep reaches out regarding a deliverable, the hospital should respond timely and work earnestly to meet the payor’s deadline.
- If a payor rep feels like the hospital is owning its side of the partnership, the rep will be more likely to follow through on its share of deliverables.
Incentivize your team to build relationships
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- Try to incentivize or gamify the process within your teams. Offer points for learning birthdays, anniversaries, family member names, favorite movies, etc.
- Provide rapport-building training, call coaching, or a library of classic sales books like Never Eat Alone, How to Win Friends and Influence People, To Sell is Human, and Emotional Intelligence 2.0.
It isn’t easy to establish relationships, but reps who make the attempt to do so tend to make inroads that pay dividends. The time invested will eventually pay off because your reps will recover more revenue, and the strong relationship culture you have created will impact the whole team and all future hires.