Physicians Practice - January 2008 - (Page 73)

CME FINANCE BEYOND REIMBURSEMENT BY BOB REDLING TOOLS TO FIX YOUR PAYER MIX Savvy stock players know that high management costs and overhead expenses can eat away at an investment’s potential return. Determining these variables can help them decide whether one investment might be a better match for their goals than another. So why not take an investor’s approach to determining which payers you contract with? Unfortunately, many physicians just look at a payer’s promised fee schedule (the return) when signing up for or renewing a contract. They give little thought to the costs required to collect that return. A payer’s policies and practices can signiﬁcantly add to your practice’s overhead expenses. “That juicy fee schedule won’t be worth much if the payer always denies your claims and makes your staff spend hours and hours doing follow-up work just to get payment,” says Atlanta-based medical practice consultant Elizabeth Woodcock. Woodcock says the time your staff spends to rework unjustly denied claims, chase down preauthorizations for routine tests, and tend to other payer issues could add up to hundreds of hours over the course of a year. Every dollar a payer adds to your overhead costs is one dollar less you’ll receive for providing services to your patients. RATE YOUR PAYERS LEARNING OBJECTIVES After completing this article, readers will be able to: • Assess how a payer’s policies and • Plot payer performance based procedures contribute to a practice’s collective workload. on both subjective and objective measures that affect a practice’s overhead costs. beneﬁt to a practice by comparing its performance measures and reimbursement levels. • Determine a payer’s overall Why not put a little effort into ﬁguring out which ones add value to your practice and which do not? Some indicators of payer performance, such as days in A/R, are easily measured. Others, such as how well a payer communicates with your staff, are more subjective. But subjective measures are also important, says Marilyn HappoldLatham, the administrator of the eight-physician Women’s Clinic in Portland, Ore. “When I put it all together, it helps me to decide whether or not I’m going to keep dealing with a payer.” When rating payers, Woodcock suggests using Medicare as a standard against which to judge commercial insurers. To evaluate payers in the categories listed in Table 1, assign a score of “0” to payers that are comparable to Medicare in each measurement; assign a “+1” to payers that are more difﬁcult to work with than Medicare in each category; and give a “-1” score to payers in the areas in which they are easier to deal with Bob Redling has written on practice management topics for 10 years. He has been practice management editor for Physicians Practice, Web content editor and senior writer for the Medical Group Management Association, and a speechwriter for the American Academy of Family Physicians. He can be reached at editor@physicianspractice.com. JANUARY 2008 | PHYSICIANS PRACTICE | WWW.PHYSICIANSPRACTICE.COM 73 http://WWW.PHYSICIANSPRACTICE.COM

Table of Contents Feed for the Digital Edition of Physicians Practice - January 2008

Physicians Practice - January 2008 Contents The Bigger Picture: Fixing Medicaid Letters Physicians Practice Pearls: You Can Teach an Old Dog New Tricks Noteworthy Cover Story: Fee Schedule Survey: 2007 Results Adding Ancillaries: Bucking the Practice Ask the Experts Idealab: 'How I Got Over My EMR Excuses' Technology: Don't Be Denied The Tech Doctor: Blessing or Curse? The Administrator's Desk: Learning From the Best Coding Career: To Partner, or Not? Management: Controlling Your Inventory Human Resources: How to Fire an Enployee Finance: Beyond Reimbursment - How to Fix Your Mix Classifieds Advertiser Index

Physicians Practice - January 2008

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