Readers Write: It’s Time to Hold Payers Accountable For Their Games

It’s Time to Hold Payers Accountable For Their Games
By Matt Seefeld

Matt Seefeld is EVP of MedEvolve of Little Rock, AR.

Payer, provider, and patient alignment — it’s the holy grail of healthcare’s focus on value to ensure the best care is delivered at the lowest cost. And while industry stakeholders have the best intentions to achieve this critical big-picture goal, the average healthcare organization sinking in denials management knows that we still have a long way to go.

A report issued by the Kaiser Family Foundation in 2022 reveals the continuation of year-over-year trends of high rates of claims denials. The report found that approximately 18% of in-network claims were denied on average during the reporting period, but some plans reached as high as 80%. This reality equates to increased burdens on revenue cycle teams and delayed reimbursements, two challenges today’s healthcare organizations must mitigate amid burnout, staffing challenges, and tight operational margins.

While provider organizations are wise to implement infrastructures and automation to ensure clean claims are delivered to payers on the first try, they should also consider how to improve reimbursement through the lens of payer accountability. For instance, understanding payer mix and where an organization is getting the most bang for its buck can provide a foundation for better negotiating power.

Jumpstarting a payer accountability strategy starts with visibility into key payer trends and data, or the ability to maintain a payer scorecard.

Payer Scorecard: Laying the Foundation for Payer Accountability

Improving operational margin is imperative for today’s physician practices. As shifting reimbursement models place more financial responsibility on patients, healthcare organizations must have a holistic strategy that proactively addresses the full lifecycle of billing processes to maximize use of limited and expensive internal resources.

Effectively negotiating with payers is a key part of this strategy, yet few provider organizations understand where they are getting the most ROI against work effort with their health plan partners. For example, can your executive team answer the following questions?

• How many claims touches did it take to get paid from Payer A compared to Payer B?
• What is the ratio of zero-touch rate (claims paid without humans getting involved), denials, and work effort between Payer A and Payer B?
• How does at-risk AR, collection effectiveness, and work effort stack up between payers?
• What is your denial overturn rate and associated work effort to achieve this result?
• Which health plans are having the greatest impact on gross collection rate (GCR) and net collection rate (NCR)?

When providers can identify payers that are creating the most internal revenue cycle havoc or have poor ROI when compared to work effort, they are empowered to confront issues head on. For example, it’s fair to ask why reimbursement from Payer A appears in 14 days while Payer B takes 28 days on average. Or why my organization is getting 60 cents on the dollar from one managed care contract and 70 cents on the dollar for another. In either case, maybe it’s time to stop seeing a particular carrier’s patients and opt for better contracts and partnerships.

Increasing Zero-Touch Rates Through Payer Accountability

The goal for any healthcare organization’s revenue cycle is to achieve the highest zero-touch rate possible. Not surprisingly, this measure reflects claims that are processed and paid without any human involvement. When that happens, work effort and cost to collect automatically goes down, and revenue cycle teams operate more efficiently.

A 26-location, 75-provider orthopedics and neurosurgery group set a course to improve its zero-touch rate with payer accountability as a key part of the strategy. To do this, they needed visibility into the daily work of every staff member and a way to track payer interactions. Because EMR and practice management systems do not have the analytics capabilities to produce the level of granularity and visibility to answer key questions, the organization deployed a framework of effective intelligence to identify where breakdowns were occurring along the revenue cycle that required human intervention.

They created a dashboard to measure zero touch visits against claims edits, refiles, denials, and actions required by the billing team to get paid. This strategy complemented other payer accountability use cases that compared work effort against at-risk AR as well as how each payer was impacting net collection rates (NCR). In essence, the team developed and maintained an ongoing payer scorecard.

Since implementing this dashboard, the organization has been able to improve its payer contract negotiations and refocus efforts around the greatest ROI. Early results have been promising:

• 98% NCR, above industry benchmark of 97%.
• 77% increase in production from redesigned processes.
• 62% zero-touch rate.

At a time when insurance companies are reporting billion-dollar profit margins and providers are finding it increasingly difficult to stay independent (or in business), it’s important that healthcare organizations have proactive visibility into payer insights. Payer accountability must become a strategic part of broader revenue cycle processes to maximize bottom-line impact and position for a viable future.