Woodcock Wisdom: Identifying Underprofile Payments
Guest blogger Elizabeth Woodcock wraps up her series this week. She covered a hot self pay topic with Creating Payment Plans that Actually Work, Part 1 and Part 2. And on the insurance side, she has tackled Denials: Your Treasure Chest. We're excited to feature Elizabeth, a widely-reputed consultant, speaker and author who has championed improvement in medical practice operations and revenue cycle management for nearly 20 years.
Ensuring that every claim is paid requires diligence, while ensuring that the reimbursement is correct requires painstaking attention to detail.
That’s right – it’s not "good enough" to determine that a remittance is received. Your practice needs to have the tools in place to ensure it’s the right reimbursement. Research has shown that insurance companies often reimburse physicians at levels that are below expectations – these are called underprofile payments. The National Health Insurer Report Card, published by the American Medical Association, reported that percentage of claim lines in which the insurer’s allowed amount equals the contracted fee schedule rate dipped as low as 61.55% with United Healthcare. To avoid getting stuck with unjustifiable low rates, vigilance is paramount.It all starts with the contract. The insurance company has a schedule of allowables that signal what you are permitted (“allowed”) to collect. Ask for the schedule – often called the “fee schedule” – when you sign and renew the contract. Tied to the individual CPT® codes, these allowables may vary by product, so you may have multiple rates for a single insurer.
Because there are more than 7,000 CPT codes – and dozens, if not hundreds, of health plans with which you participate – it’s nearly impossible to manage these allowables by hand. Unless you are very limited in the scope of the CPT codes you use, it’s critical to deploy the contract management solution embedded in your practice management system. As remits are posted, manually or automatically confirm that the allowable reported by the insurer for each transaction matches the expected reimbursement as defined by the contract.
Flag underprofile payments and address each one with the insurer individually, or assess the opportunity to appeal for appropriate payment on a bolus of services if and when underprofile trends are determined.
Finally, recognize that allowables are just that – what you are allowed to collect. With consumer-directed health care products shifting more financial responsibility to patients, capturing the revenue that you deserve isn’t limited to focusing on the insurer’s portion of the transaction. Indeed, you’ll need to ensure that you also shift – and collect – the appropriate financial responsibility from patients.