Use Your Payer Mix to Boost Revenue
Ever feel like you are working more and getting paid less? You might be if you haven’t taken a close look at your payer mix lately.
Your payer mix may shift over time even if you haven’t changed the insurances you accept. That’s because there are two elements to your payer mix: the fee schedules of the payers you accept and the number of patients you get from each payer. It is the interplay of the two factors that comprise your payer mix.
Managing your payer mix
The first step to maximizing revenue is understanding your current payer situation. The best way to assess where you stand is by examining:
- The payers you accept
- Your contracted rates with each payer
- Your most common CPTs
- How many patients you see from each payer
Let’s take a closer look at each category
Payers you accept – Hopefully, there is a reference list posted in your office of your in-network payers (if not, consider making one). Don’t forget to include patients as a payer group.
Most common CPTs – Examine claims and determine your most common 10 – 20 CPTs. These should make up most of your reimbursement and will give you a more accurate read of the actual situation than analyzing every single CPT.
Payers’ contracted rates – In many cases, this is more difficult than it sounds. Reimbursement rates should be included in your payer contracts. Some payers detail each CPT code, while others give you a percentage of Medicare or Workers’ Compensation. Percentage calculations can get complicated because some payers use base rates from the year of the contract, while others pay current year rates. Calculate your reimbursement accordingly for each CPT. It is not uncommon for contracts to be lost. If you can’t hunt one down, contact your payer to get your fee schedule. Use your self-pay fee schedule for patient payments.
The number of patients you see from each payer – Having this count will reveal the weight of each payer in your payer mix. Remember, self-pay patients should be included as a patient population.
Analyze your information
Create a spreadsheet to compare reimbursement for each of your common CPTs from every payer – this will tell you who pays most (and least). After determining which payers have the best (and worst) reimbursement, look at the number of patients you see from each payer. The combination of compensation and patient payer ratio is your payer mix.
Remember that your payer mix can vary from day-to-day, month-to-month, and year-to-year. This variance explains why you might get paid less for doing the same amount of work. One week may have more patients from a good payer come through your doors, while another week might see more patients from a payer with lower reimbursement.
Improve Your Revenue
Analysis will reveal opportunities for increased income and tell you which payers you may need to renegotiate with or drop. Ideally, analysis will establish that your best payers have the largest patient populations walking through your office doors. If you find that is not the case, here are some scenarios you might see and how to fix the situation:
Your lower payers are most of your patient population. If this is the case, it may be time to renegotiate your contracted rates. Investigate if you are one of only a few providers in the area that is in-network because that can be an advantage in negotiations. Conversely, if you are curious about the larger insurance companies in your area, find a helpful resource here.
You don’t have many patients from your highest payers. Find out which employers in your area offer your high payers and market to their employees. If you take referrals, find the providers that are in-network with your top payers. Reach out to those practices and confirm they have your office’s contact details for appointments.
Some payers have meager reimbursement rates. These payers might not pay what your time is worth, so, it may make business sense to drop them. Renegotiating fee schedules with other payers will improve revenue; actively marketing to employees of companies with better payment rates will fill appointment slots. It’s a hard decision to drop a payer, but sometimes it must be done to keep your practice in business.
The critical thing to remember about your payer mix is that it can, and will, change. Periodic audits and adjustments will keep your practice on track and ensure you’re maximizing your reimbursement opportunities.
If you would like to learn more about creating an effective payer mix, contact us at 412-424-2265 or email firstname.lastname@example.org.