Avoid A/R problems when negotiating contracts
It’s best to anticipate where problems may arise and to resolve those issues as early as possible when it comes to reimbursement. Although many agencies are unfamiliar with or dread negotiating a managed care contract, experts tell Home Infusion Therapy Management that such negotiations present home infusion agencies with opportunities that will reap big rewards down the road.
When you enter into negotiations, it’s important to have the right mindset.
"For an upfront formal contract negotiation, one should, by all means, negotiate positively and from a position of strength," notes Kate Barry, president of NewStart Systems in Framingham, MA, a provider of full outsourcing services for recovering receivable and consulting. Negotiating from a position of strength is easy, notes Barry. "If you’re giving away something that is valuable to you [such as an insurance company offering a discounted rate for your services by agreeing to send a certain amount of work your way], then obviously it must have value to the provider. If you agree upon that, then both parties have got to give on something. If someone is not meeting their 45-day turnaround time with you, you have that back door built into the contract and can say We agreed upon this.’"
Mike Tortorici, RPh, MS, president of AlternaCare of America, says a 30-45 day window is fair, but you sometimes may want to consider accepting a 60-day window.
"Sixty days is the max, but it depends on the volume," he says. "If you stand to make thousands of dollars, you can be a bit more flexible."
Gary Collins, president of Professional Reimbursement in Orlando, FL, says you can sometimes request payment within 14 days if you ensure the insurance company claims will be submitted in the proper form.
"During negotiations, ask how the insurance company wants information to be presented," he says. Also, find out about their coding system. "Some payers have their own coding system. That’s one of our questions – do you want an invoice or a HCFA 1500 claim form, and if so, what codes do you want us to use to bill for these charges."
This information then goes into that company’s file. (See related article, this page.)
Once you have negotiated a date by which payment must be received, be sure you stick to it.
"If it is written into a contract, it behooves everyone within the organization to make sure they follow through," notes Barry. "Sometimes a 30- or 45-day window written into a contract is not always exercised."
In an effort to ensure prompt payment, some agencies have negotiated late payment penalties into the contract. But be careful how much you push the envelope. Get too bold, and your exuberance may be thrown back in your face.
"I’m now seeing insurance companies saying, If you’re not able to provide the services based on the rates we negotiated, then we are going to penalize you if the deliveries aren’t being made, if there are complaints about the company, or even if the claims are being done improperly,’" says Collins.
A word of caution from Tortorici. Most managed care companies build into their contracts payment within 30 or 60 days. However, networks are now telling providers that the provider will be paid when the network is paid, which leaves you at the whim of how actively the network will pursue claims.
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