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Tracking contracts could pay off in long run

Practice Management. By Mike Norbut, amednews staff. March 22/29, 2004.

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The prospect of keeping track of the fee schedules from your many insurers is enough to make you, or the staff member you assign it to, cry. But as tedious as contract management might be, consultants say the practice that does not keep track of what it should be paid stands to lose a lot of hard-earned cash.

"The bottom line is it's probably going to cost you money," said Bob Priddy, a Denver physician practice consultant and executive director of the Physician Career Network, an affiliate of CareerLab, a career strategy and leadership development firm. "It's difficult to see where the charges are being denied categorically."

One managed care firm might pay at 120% of the 2000 Medicare schedule, while the next pays at 115% of the 2002 schedule. The possibilities are many, and the confusion quotient increases with every agreement.

Add to that the miscommunication -- or some may say neglect -- on the insurer's end, which could produce lower-than-contracted payments, and it could be a formula for lost income.

If a practice doesn't follow its reimbursements, it might never know which insurers are not paying the contracted amount. Or, an aggressive billing department could be challenging the wrong payments, wasting office staff time and contributing to a contentious relationship with a payer.

"What we're finding is many offices can't even find a copy of the last contract they signed," said George Chapman, senior health care consultant with Dermody, Burke & Brown in Syracuse, N.Y. "Sometimes you have someone else negotiate contracts, like an IPA, and you're supposed to get 115%. But because of a lack of communication, you keep cashing checks that are for only 110%."