A 2004 survey by the Medical Group Management Association revealed that medical practices that don't track their payer contract rates are reimbursed on average 4 percent less per evaluation and management code billed. Family medicine practices reported a 7-percent difference. This can add up.
Monitoring the contracted rate in your payer contracts is an important step in managing your revenue cycle. Are you receiving the full payment due your practice for every claim you file?
You can start by creating a simple spreadsheet to track just the private contractors that account for most of your revenue, and the contracted allowable for the 25 or so codes that make up most of your billings. Use the spreadsheet as a tool for making sure that each plan pays you appropriately.
- Compare your billed charges with your contracted rates to make sure you are not billing below the allowable rates.
- Train your staff to flag claims payments that are below the contracted rate, and assign someone to follow up.
- Compare the allowables to Medicare. Rates less than or at Medicare rates are not reasonable, and are ripe for renegotiation at contract renewal time.
- Note when contracted rate adjustments are scheduled to go into effect so you can make sure the payer honors the new rate.
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