Payer Performance: How to not be bullied by insurance payers.

How do you manage the conditions in which bullying, an extreme form of coercion, occurs so that it is no longer an acceptable act in your practice?

Common advice tells us that we should not allow the victims to blame themselves for being bullied, however in this case should we make an exception?

In what way are you enabling yourself to be bullied?

Do you know what services are paying well and what services are actually losing you money?

What is Payer Performance?

Payer Performance is the act of comparing how each insurance plan is paying you for the types of services you provide. Their performance is measured by how efficient, transparent and consistent the payments are.

Efficiency, Transparency, and Consistency

In general, Payer Performance is determined by 3 main factors:

How quickly does payment come after the claim has been submitted and how often do claims need to be resubmitted.

How much insight do you have into why or why not a claim is getting paid in full, on time, or at all.

How predictable is the rate and amount of payment for each insurance plan.
Are they paying the same amount for same procedure every time? Can you expect payment within a certain time frame so you can judge your incoming money.

Charges vs. Reimbursement: Tracking the Gap

In the previous lesson we talked about the calculation of charges v. reimbursement.

I like to call this “tracking the gap”.

This is the difference between what you expect to get paid based on contracted rates with the Insurance Plan (Charges) on a particular service and what you actually get paid (Reimbursement).

You should be calculating this for each insurance plan so you can track who is paying you what they say they will.

Why do insurance plans pay different amounts for the same service?

It is important to understand the basics of how an insurance company works to understand why you get paid less than you ask for in the first place.

What is Risk Adjustment?

Risk adjustment is the calculation by which insurance companies make sure they bring enough money in to cover outgoing claims, overhead, and PROFITS.

Yes, people. Insurance companies are in the business of making profit. BIG PROFIT.

Remember that Insurance Companies are financial asset companies first, then they happen to be healthcare companies second.

Risk adjustment is a complex issue and there is a lot of data about it, I would encourage you to visit the CMS website to get a least a basic understanding of how it works within population health guidelines.

You need to be aware of risk adjustment because of one simple reason. When you get denied or underpaid for a service, it is not about YOU or your contract.

You can fight to negotiate your contract all you want but the bottom line is when the insurance plan needs to make its annual report numbers it will shave payments.

Don’t Be a Victim, Carry a Big Stick, and Create a Payer Report Card

You can create a report card, it will let you know how each insurance plan is doing against the others and you can be in control of your own destiny.

Here is your power tool:

Use the report card worksheet to compare and analyze your insurance plan reimbursement trends.

Use it to track your average reimbursements for each insurance plan and compare them to each other.

How to Not Be Bullied by Insurance Companies

When it comes to participating in any Insurance Network Plan it is your choice.

Remember that no one is forcing you to accept that insurance plan, that contract, or those payments.

Yes, if you drop a certain plan then you run the risk of losing a subset of patients and that may impact your practice cash flow.

***But what is your opportunity cost?***

In other words, how much harder are you working to make up for the shortfall in reimbursements by some insurance plans.

The common feeling is that we can’t “trust” insurance companies when it comes to paying for services.

Don’t worry about how much you trust the payer to pay.

Here’s what you should worry about:

Do you trust the insight and knowledge you have about each procedure and what will be paid? Is it consistent? You want to feel good and confident about what is being paid and when.

My Simple 3R Formula to be master of your own destiny.

When you are empowered with a report card then you know what type of impact it will have on your practice to drop one network or focus on recruiting more members of a better performing plan.

Here are the things you should be doing with that information to be in control:

1. Review:
Review your payments, contracts and relationship with plans who perform poorly.

2. Restrict:
Drop or restrict procedures that are dragging you down.

3. Recruit:
Actively recruit patients from better performing services and payers.
(Yes, Marketing Works.)


About The Author

James Riviezzo

Over the past decade, I have served over 50,000 (mostly) satisfied patients. I have tracked measured and documented what makes a successful practice inside (and outside) the third party payer and oversight system of medicine.