Revenue Sources – Part 2: Contract Analysis
Rocking Your Revenue Cycle
A master series on maximizing Excel
Practices and providers are facing many challenges regarding reimbursement for services; ICD10, PQRS penalties, and the Sustainable Growth Rate calculation come to mind. In this series, we will show you some basic tools using Excel to keep a finger on the pulse of your revenue cycle.
Revenue Sources – Part 2
Patient Revenue – (Contract Analysis Tool)
In our second segment, we will focus on revenue sources and how to track and analyze those sources using the Contract Analysis tool. All you need is your volume data and your carrier contracts to answer the most pertinent questions about your revenue sources, such as …
Are my contracts competitive with industry standards?
Reviewing fee schedules and contracts can lead to significant revenue increases for your practice. Initiating a conversation with your primary payors is the first step to boosting your revenue. In order to easily facilitate these discussions, we recommend that you build a revenue fee analysis table that can be used in any negotiation.
Here’s how it works:
- Enter your contracts into Excel side-by-side or copy them into a new workbook from your Patient Estimator tool. If you have all of them loaded you can use this workbook for any negotiation.
- Input your current charges to ensure that they are higher than all of your contracted fees. It is a good practice to review your charges annually to ensure you are not leaving any money on the table
- Enter a formula for manipulation of the proposed rates. For example, does the payor assign a specific percentage of Medicare to E&M codes and a different percentage for surgeries? Using formulas within Excel tables allows you to update the entire analysis at once.
- Calculate projected revenue increases to verify that this negotiation is a WIN for your practice. You could also use this tool to target specific categories for future negotiations.
In a case study example, an orthopedic practice entered into a negotiation with a major payor intending to receive an increase for surgical procedures. After completion of an analysis involving their volumes and service mix, it became apparent that an increase in E&M reimbursement and PT services would actually benefit the practice MORE than an increase in rates on surgical procedures. With this data in hand, the practice chose their battle with the payor and WON. Sometimes a more focused approach will get you further down the road in a negotiation.
Taking the time to set up a fee schedule analysis template will pay for itself over and over again. If you find that the payors are not willing to negotiate based on numbers alone, you may have to present a case by selling your practice to the payor. How do you save the payor and their members money? Why is your quality superior to competitors? What makes your practice unique? If you would like assistance in creating a fee schedule analysis template or selling your practice’s story to the payors, please give us a call at 1-866-347-0001. We want to help you WIN.
Learn more about how to rock your revenue cycle by reading part one of our series about patient revenue.