Revenue Cycle

Top 4 ASC Payer Contracting Practices – Part 1

Ambulatory surgery center (ASC) administrators face a variety of challenges when it comes to successfully managing their payer contract negotiation deadlines.

According to Andrea Woodell, Vice President of Managed Care at Regent Surgical Health, hard-working and well-intentioned administrators and office managers are often too busy balancing numerous job responsibilities to dedicate the needed persistence and focus required to successfully negotiate expiring payer contracts.

In the first of a two-part series, Regent RCM outlines two of four top strategies to ensure seamless payer negotiations.

  1. Incorporate Centers for Medicare & Medicaid Services (CMS) changes into your contracting

There must be ample room in the budget for contractual changes to occur, says Woodell. “You should not rely on the payer to be responsive or have the bandwidth to renegotiate your contract. There’s just not enough staffing to do that,” she advises.

Medicare has been making a series of significant adjustments causing sizable reimbursement changes, Woodell says. “Codes 62310 and 62311 are being deleted and replaced with 62321 and 62323,” she explains. Facilities performing hundreds of these cases will incur cost reductions at $53 apiece, she adds. “This could add up to tens of thousands of dollars – and that’s just under Medicare patients,” Woodell estimates.

Woodell also emphasizes codes 64490 and 64493 will soon take an even bigger hit, decreased under Medicare by $115 each. Woodell therefore recommends budgeting for changes within your current negotiations.

“Not every payer contract pays based off a percent of current year Medicare, some contracts will have language stating the contract is based off 2015 Medicare. Your current rates will remain and will not be impacted,” Woodell says. “But the contracts that are based off current year Medicare will immediately see a decrease.”

“One large payer gave me an eight percent increase for a two-year contract,” she explains. “Subsequent to adjusting for 2017 CMS changes, this eight percent increase then became a 4.7 percent increase. Eight percent from a large payor plan is a slam dunk – but 4.7 for a two-year? Not so much. So, I was right back at the table,” she says. “It’s not done, but I’m fighting the fight.”

  1. Plan for the future with case mix changes

Woodell says more focus needs to be placed on negotiating contracts and planning for the future with case mix changes and updated procedures.

“Most payers are unwilling to open up negotiations during a normal existing contract term,” she says. “Therefore, it’s critical to plan for the future. Even if you’re 9-12 months away, put it in your contract now.”

Adds Woodell, “If you have it carved out already, you can avoid when Medicare releases it and adds it to their list because they’re not going to be generous.”

To learn more about payer negotiations, contact Andrea Woodell. She has negotiated on behalf of health care providers and professionals for over 20 years, working in tandem with business offices to enhance collections.

In part two of Regent RCM’s blog series, Woodell details how to optimize annual contract negotiation increases and what is most overlooked regarding TPA & PPO contracts.

Click here to read part two!