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  • Nancy Powell

Are Payer Contract Reviews a New Year’s Resolution for You?


Should it be? When was the last time you opened your file drawer and looked at your contracts? Do you know if any of them have expired?

Because medical practices are so busy on a day-to-day basis sometimes the administrative burdens, such as contract review, gets put on the back burner until one day it’s been years since we’ve looked at them. One way to combat not keeping up with your contracts is to join a network, but are you getting annual reports and updates from your network administrator? Do you belong to more than one network and do you know which network is bringing you patients?

There are some simple things you can do to determine if it’s time to review your contracts:

  1. Open the file drawer. Are they in there? Many times contracts get lost and just finding a copy of the contract can be a momentous event.

  2. Look at the terms of the contract. Has it expired? Many contracts will have what is called an “Evergreen” clause, i.e. the contract will just stay intact until you terminate it. This allows for you to continue to get paid without an updated contract.

  3. Do you know if the fee structure of the contract is stagnant? Many of the payers will do an annual update to their fee schedule through an amendment that does not require a signature. Do you have copies of those or do you know if your payers do annual updates?

Once you’ve found all your contracts then you really need to compare your payers against one another to insure you don’t have a contract that is outside of market. Here are a few steps you can take:

  1. Compare allowables utilizing total RVUs. I like to use the most current RVU table, so 2018, even if the contract is paying on old RVU tables as it equalizes everything to a standard.

  2. After you’ve calculated allowables per RVU by payer, do you have any that fall outside of market by more than 5-10%?

  3. Prioritize based on #2 above which payer you may need to renegotiate.

  4. Talk to your business office. Sometimes a payer may be 5% above market in fees, but they may not pay timely, tend to deny too often, and just are an administrative burden.

Don’t have time to do all this? Feel free to contact MedMan, we are here to help.