Here are five ways to approach contract negotiations so your ambulatory surgery center can get paid more from commercial payors.
1. Prove your cases are safely performed in an ASC. Insurance companies are sometimes unwilling to negotiate contracts for more complex cases, such as spinal fusions, performed in a surgery center. Medicare does not currently reimburse for any spine procedures in outpatient ambulatory surgery centers, and some payors follow suit. Show them quality data to prove these procedures are safe and cost-effective in the ASC.
"Some payors hide behind the Medicare ASC-approved list and the majority of complex spine procedures aren't on the list," said Dan Connolly, vice president of payor contracting for Pinnacle III. "In that case, you need to demonstrate the value and safety of performing these procedures in your center. Sometimes this will require the coordination of a meeting between the insurance company's medical director and the key surgeon(s) from your center to demonstrate the efficacy of performing these surgeries in the ASC."
Payors in some markets have begun adding orthopedics procedures to their proprietary grouper map. For example, laminectomies and partial knee replacements haven't historically been on the Medicare-approved list and therefore not on the proprietary grouper list, but they are increasingly showing up on proprietary grouper listings now. Since they are on the list, payors recognizes they can be safely carried out in an ASC, he said.
2. Present your patient satisfaction scores during negotiations. "Put your best foot forward" and present your patient satisfaction scores upfront, Reed Martin, chief operating officer for Surgical Management Professionals, said. It's important to have patient satisfaction as an agenda item for quarterly board meetings and then to present the information to payors.
The surgery center should be thinking about how to improve the patient experience on a regular basis — and payors want to know that. "ASC patients are managed care members, and payors want to know how your facility compares to other hospital systems or other ASCs," he said.
3. Avoid limiting contract clauses. Several large commercial payors — including Aetna, United and Humana — have begun insisting on three-year agreement rights for managed care contracts. No matter what, don’t sign a three-year contract, said Andrea Woodell, managed care director at Regent Surgical Health.
Signing a three-year agreement locks you into reimbursement rates for the remainder of the term. An ASC's case mix and ownership structure are not static and often contracts require ongoing adjustments. A three-year contract would keep an ASC from being able to adjust to the changing needs of an evolving case mix.
"If you don’t sign them, (the payors) do have alternate, less binding language," she said.
4. Propose participating in new payment programs. Participating in a pay-for-performance or bundled payments program rewards surgery centers for raising quality and lowering costs by adding volume and revenue, said Steve Arnold, MD, chief medical officer at Access MediQuip. "Bundled payments can actually raise revenue when the center is able to utilize Access MediQuip’s ability to buy the implants at a lower cost," he said.
There aren't many surgery centers participating in these types of programs today, and most aren't ready to participate at this point. "It's very new, but there are more surgery centers looking at it," he said. "The surgery centers who should be looking at it are the ones who are most efficient or becoming more efficient."
5. Negotiate with the future in mind. Set yourself up for the next contract during current negotiations, said Jim Odom of The C/N Group. Stay abreast of the ever-changing healthcare industry and know which types of procedures are profitable and how that may change.
"If you position product lines you know are going to decline over the course of the current contract, establish a foundation now, so the pain is less when the contract kicks in down the road," said Tom Faith of The C/N Group.
Additionally, ask payors about their timeline for switching to the APC reimbursement model. "We've been listening to what they say and how they answer to position ourselves better for the future," Mr. Odom said. "We ask the payor what they are talking about internally for one or two years down the road, such as which procedures are bring pushed into ASCs and which have pressure to be performed at hospitals."
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1. Prove your cases are safely performed in an ASC. Insurance companies are sometimes unwilling to negotiate contracts for more complex cases, such as spinal fusions, performed in a surgery center. Medicare does not currently reimburse for any spine procedures in outpatient ambulatory surgery centers, and some payors follow suit. Show them quality data to prove these procedures are safe and cost-effective in the ASC.
"Some payors hide behind the Medicare ASC-approved list and the majority of complex spine procedures aren't on the list," said Dan Connolly, vice president of payor contracting for Pinnacle III. "In that case, you need to demonstrate the value and safety of performing these procedures in your center. Sometimes this will require the coordination of a meeting between the insurance company's medical director and the key surgeon(s) from your center to demonstrate the efficacy of performing these surgeries in the ASC."
Payors in some markets have begun adding orthopedics procedures to their proprietary grouper map. For example, laminectomies and partial knee replacements haven't historically been on the Medicare-approved list and therefore not on the proprietary grouper list, but they are increasingly showing up on proprietary grouper listings now. Since they are on the list, payors recognizes they can be safely carried out in an ASC, he said.
2. Present your patient satisfaction scores during negotiations. "Put your best foot forward" and present your patient satisfaction scores upfront, Reed Martin, chief operating officer for Surgical Management Professionals, said. It's important to have patient satisfaction as an agenda item for quarterly board meetings and then to present the information to payors.
The surgery center should be thinking about how to improve the patient experience on a regular basis — and payors want to know that. "ASC patients are managed care members, and payors want to know how your facility compares to other hospital systems or other ASCs," he said.
3. Avoid limiting contract clauses. Several large commercial payors — including Aetna, United and Humana — have begun insisting on three-year agreement rights for managed care contracts. No matter what, don’t sign a three-year contract, said Andrea Woodell, managed care director at Regent Surgical Health.
Signing a three-year agreement locks you into reimbursement rates for the remainder of the term. An ASC's case mix and ownership structure are not static and often contracts require ongoing adjustments. A three-year contract would keep an ASC from being able to adjust to the changing needs of an evolving case mix.
"If you don’t sign them, (the payors) do have alternate, less binding language," she said.
4. Propose participating in new payment programs. Participating in a pay-for-performance or bundled payments program rewards surgery centers for raising quality and lowering costs by adding volume and revenue, said Steve Arnold, MD, chief medical officer at Access MediQuip. "Bundled payments can actually raise revenue when the center is able to utilize Access MediQuip’s ability to buy the implants at a lower cost," he said.
There aren't many surgery centers participating in these types of programs today, and most aren't ready to participate at this point. "It's very new, but there are more surgery centers looking at it," he said. "The surgery centers who should be looking at it are the ones who are most efficient or becoming more efficient."
5. Negotiate with the future in mind. Set yourself up for the next contract during current negotiations, said Jim Odom of The C/N Group. Stay abreast of the ever-changing healthcare industry and know which types of procedures are profitable and how that may change.
"If you position product lines you know are going to decline over the course of the current contract, establish a foundation now, so the pain is less when the contract kicks in down the road," said Tom Faith of The C/N Group.
Additionally, ask payors about their timeline for switching to the APC reimbursement model. "We've been listening to what they say and how they answer to position ourselves better for the future," Mr. Odom said. "We ask the payor what they are talking about internally for one or two years down the road, such as which procedures are bring pushed into ASCs and which have pressure to be performed at hospitals."
More Articles on Coding, Billing and Collections:
PatientPay, Healthpac Computer Systems Develop Billing Partnership
National Medical Billing Services Named a Top 100 Outsourcing Service Provider
Indiana Providers to Increase Bundled Payments