Areas of concern include:
High volume patient base by carrier: Practices and individual practitioners should be evaluated for insurance dependency on any carrier that is 20 to 25 percent or more of their practice. This dependency creates problems as the carrier reduces the rates significantly, therefore producing an immediate reduction in revenues. Additional reimbursement concerns include reductions in cash flow due to changes in policy provision, increased difficulties in authorization and collections processes or the possibility of termination of this carrier with major employers. High volume carriers also absorb appointment times that could be available to other patients.
Low volume patient base by carrier: There is a general understanding that practices will increase patient volumes with a contracted relationship. If you find that the practice has not appreciated this benefit, it may be time to discontinue the relationship or look for ways to increase the patient volumes by reaching out to both your staff and provider relations to ensure that all are aware that you are contractually involved with patient care. This information may have gotten lost amongst either party and correction will help to increase patient volumes. If this is not the case and the patient volumes are not available in your area, reconsider the relationship with that carrier.
Fee Schedule Evaluation: The insurance dependency analysis also looks to evaluate the rates paid by all carriers in a comparison spreadsheet. It will be necessary to identify all product lines for each carrier, as there may be significant differences in reimbursement based on the product type. Generally Medicaid and Medicare programs are the lowest rates with an increase in HMO and PPO products. Preparing a fee schedule comparison spreadsheet in this analysis forces two things: (1) the practice will need to get updated rates and (2) identify those carriers that have unacceptable reimbursement rates. Positioning the practice with full details about carrier reimbursements help to flag those carriers that need to be reconsidered and/or renegotiate with the carriers to an acceptable level.
Additional considerations need to be explored to ensure that the individual physician will not be severely impacted by a decision to withdraw. If the insurance dependency issues are of great concern, there are procedures for consideration to reduce dependency for future consideration of withdrawal. Some options include reducing your overall dependency over time or removing part of the dependency such as the HMO or Medicaid portions of the insurance plans.
• Carriers should be evaluated for fee schedules, labor involved in both the pre- and post- service components of the plan, and percent of patient population.
• Fee schedules need examination for lower than Medicare standards and should be dropped if no adjustment can be made.
• Pre-service labor issues include difficulties in obtaining the referrals necessary, authorizations for additional services and availability of ancillary services within the plan. Post-service labor issues include collection problems such as delays in reimbursement, non-covered charges for physician assistants or nurse practitioners and unacceptable bundling regulations.
• The patient population analysis involves review of the overall patient base supplied by the carrier, which permits a large reduction in the fee schedule. If the patient base is minimal, then why participate at a reduced fee? A 10 percent patient base should be considered a minimum for insurance participation.
Continued insurance dependency analysis involves identifying carrier coverage issues, collections and appeals concerns, quantity and quality of the patient base, etc. The analysis ends when you stop looking. The analysis provides patient patterns, reimbursement reliability and ultimately can lead to greater stability with good forecasting and projections while moving to improve patient base and reimbursement conditions.
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