Kevin Dowdy, director of managed care for Meridian Surgical Partners, identifies two common mistakes ASCs make when negotiating managed care contracts.
1. Tying the negotiated rates to a moving target. Many payors have converted or are converting to a CMS APC-based methodology and in doing so link the reimbursement to a percentage of current-year Medicare. With Medicare APC transition coming to an end and with unforeseen changes to Medicare as a result of healthcare reform, there is significant risk tying the agreements to a potentially moving target.
2. Negotiating in hurdle rates for implants and prosthetics. Hurdle rates can impose arbitrary guidelines for the billing of implants and prosthetics. If you must include a hurdle rate, make sure that the rate is clearly defined. Is it based upon cost or charges, single item or cumulative? If cost is used in either the hurdle rate or payment rate, make sure cost is clearly defined to include shipping and handling.
Learn more about Meridian Surgical Partners.
Read more guidance from Kevin Dowdy and Meridian Surgical Partners:
- When to Drop a Payor
- 3 Successful Managed Care Contract Negotiation Tactics (and One to Avoid)
- Two Quick Tips to Maintain an Effective Collections Process
1. Tying the negotiated rates to a moving target. Many payors have converted or are converting to a CMS APC-based methodology and in doing so link the reimbursement to a percentage of current-year Medicare. With Medicare APC transition coming to an end and with unforeseen changes to Medicare as a result of healthcare reform, there is significant risk tying the agreements to a potentially moving target.
2. Negotiating in hurdle rates for implants and prosthetics. Hurdle rates can impose arbitrary guidelines for the billing of implants and prosthetics. If you must include a hurdle rate, make sure that the rate is clearly defined. Is it based upon cost or charges, single item or cumulative? If cost is used in either the hurdle rate or payment rate, make sure cost is clearly defined to include shipping and handling.
Learn more about Meridian Surgical Partners.
Read more guidance from Kevin Dowdy and Meridian Surgical Partners:
- When to Drop a Payor
- 3 Successful Managed Care Contract Negotiation Tactics (and One to Avoid)
- Two Quick Tips to Maintain an Effective Collections Process