Payer Contracts and Federal ERISA Appeals: Using One to Avoid the Other

Recently, an article came out explaining how hospitals and health clinics can improve their payer contracts. These contracts, which exist between the healthcare provider and the commercial health insurance company, when done right, can help prevent claims from ending up at the wrong end of the state appeals process. Remember, once those appeals are exhausted, the only way to get them paid is by going through Federal ERISA appeals. With that said, hopefully, the tips, as outlined here, can help prevent this situation in the first place, as they might just lead to claims that get paid on time.

Put Yourself in the Payer’s Shoes

The first thing that you need to do is put yourself in the payer’s metaphorical shoes in order to understand their goals. According to the experts, “Even with different payment methodologies, payers have one thing in common: a desire to minimize costs. It’s essential to help payers understand how covering an item or implant supports the pursuit of that goal.” This means that you need to have a discussion with them – an honest one, at that – in order to see where your goals align and how you can come to an agreement that works for the both of you.

Gather as Much Data as Possible

Data matters. It’s good evidence for the argument that you plan on making to the payer. The experts claimed that, “ASCs may also make their argument by using payers that already give adequate reimbursement as examples; if that coverage has facilitated the migration of cases to low-cost settings, be sure to point it out using blinded data.” Basically, you need to provide as much information as possible in order to support your position on everything. Otherwise, your argument may not be accepted by the payer, or you may have to settle for terms that are less than ideal.

Be Prepared for the Negotiations to Take Some Time

Unlike other types of negotiations, your company and the payer might spend a good amount of time together, discussing everything, before you reach an agreement. This isn’t an overnight or quick process. Overall, you can expect that the “Negotiations can take up to a year to complete, so from the get-go, set timeline expectations for final contracted rates. To prevent delays, create an outline of key arguments supporting reimbursement, and develop a strategy for communicating those to the payer.” Be patient and don’t expect things to go quickly. In fact, the longer that things go on, the more likely you are to receive the results that you want.

Form Relationships with the Payer’s Personnel

You’ll be negotiating everything with one or two key personnel who work with the payer. This means that you’ll get to know them well. Don’t view this as a bad thing, as it’s not. In fact, “These contacts can help get information in front of decision-makers at the insurance company. Utilize your contacts. Present the case to them, but ask them to take it up the ladder in the correct fashion. When you have an MD on your side, it makes a world of difference.” The better your relationship, the stronger the agreement. On top of this, if they truly enjoy your company, then you are more likely to end up with the results that you want. It all comes down to how well everyone gets along.

Know What Your Ideal Outcome Is

What do you want the agreement to accomplish? Obviously, your main goal is to get those claims paid. There might be others as well, including things like having them paid within a certain time period – before they end up needing to go through the state-level appeals process. You also must understand that they have outcomes that they want as well. This is a crucial part of the negotiations. Overall, it’s up to you to make “A strong business case should include detailed information on the product’s clinical results and how it can benefit patients. [The expert] recommended customizing patient satisfaction surveys to collect negotiation-relevant information.” This process involves finding something that both parties will agree to. You need to work until an ideal outcome has been reached.

Ask for What You Want

On top of knowing what you want to achieve, it’s no surprise that you also must ask for what you want. According to the experts, “Ahead of negotiations, determine where reimbursement changes would have the biggest impact. If a certain payer comprises a large percentage of cases, for instance, that may be the right payer to target for coverage. The next step is reviewing each payer’s specific methodology — such as the outpatient grouper method or fixed fee for service — because no two payers follow the exact same methodology.” It’s all about the impact and using the methodology to come to an agreement that makes everyone involved happy.

Finally, Pay Attention to the Cost Savings

Overall, the cost savings are what matter. What will they be for your clinic or hospital. What will they be for the commercial health insurance company? As the expert stated, “It’s essential to explain the benefits of shifting cases from the high-cost hospital setting to low-cost ASCs. ASC administrators shouldn’t shy away from estimating the potential savings opportunities they can deliver health plans.” This goes beyond the ACS however, as these negotiating methods – and the need to reach some mutually agreed upon terms – will help you both get what you need: a way to save money.

What If Things Still Go Wrong?

It’s good to know that you still have the opportunity to have those claims go through the state level appeals should some still fall through the cracks. On top of this, once those state-level appeals are exhausted, you shouldn’t let them linger on your balance sheet. Instead, contact us. We specialize in ERISA appeals and have a guarantee in place that applies. The Federal ERISA law applies to those unpaid claims, and you have every right to insist that they get paid.