In a recent Hayes Management Consulting blog, Paul Fox provides 5 things you should consider when looking at Non-Medicare payer contracts and high deductible health plans.
Many non-Medicare provider contracts have unwritten ramifications of which you should be aware. In today's world of High Deductible Health Plans (HDHP) what you are really negotiating is your future self-pay liability until your patient's deductible has been satisfied. Do you have a viable strategy in place to understand what your organization's options are and what you can/cannot do under your payer contract terms? Additionally, should you insist certain clauses be present in the contract which will empower your facility to accurately collect at the time of service?
Here are five things to consider before entering into an agreement with a payer.
Know the Available Plan Types
For the covered lives in your facility's geographic area, it is important to understand the type of plans being offered to the large employer groups. These patient populations could include a large state workforce, public school systems, prisons and other large employer groups. I live in the capital city of New York state where there is a vast New York state employee workforce centered in the middle of town. NY state employs 10,000 individuals who get their healthcare from the many Capital District providers.
When you sit at the negotiating table with a payer, it is always a good idea to understand which plans will be offered to those large employer groups in your region. If all or most of the plans offered to that large state employer group or school district is in some form of HDHP, you now have additional things to consider when crafting the specific contract language. Do you really want to discount your reimbursement rate to 30 percent of charges knowing you will have to eventually treat each HDHP patient as a self-pay after insurance patient? There are significant added costs and risks associated with this type of patient liability.
What does that mean to you? Patients selecting an HDHP will receive services within the facility and provider networks and will eventually be treated much like straight self-pay patients. This includes things like billing statements, credit letters, phone calls, etc. In many of the reimbursement analyses I have performed, there is a direct correlation between the self-pay population you serve and the amount of uncompensated care (bad debt) reported in your cost reports.
Another way to look at the issue is to ask how easy will it be for the patient to come up with $2,000 - $4,000 in cash to satisfy his or her HDHP deductible? Surprising the patient with a self-pay bill following their services can be confusing for the patient and a daunting task for your staff, and can put you in the hot seat when it comes to public opinion. Counseling patients prior to services being rendered will prove much more beneficial to you and promote good will with your patients. Even if they are not happy with the bill they will eventually receive, they will be grateful to at least be aware of it up front. Often the hardest part of the process is getting the patient to understand how their insurance plan is constructed and what is/is not covered.