1. Blueprint for Success Session 2: Preparation / Data Analysis
June, 2015

2. Objectives By the end of Session 2 participants will be able to:
Perform a benchmarking analysis of payer fee schedules using RevolutionSoftware™ to set fee schedule proposals
Identify and define patterns in reimbursement to use in an overall negotiation strategy
Analyze and benchmark billed charges against an established minimum percentage of Medicare reimbursement to avoid being paid less than any contract rate and to maximize your cash based business
Compare any two of your payer fee schedules on a “normalized code” and volume base to benchmark against each other.
Learn and use a practical technique for comparing claims’ payments to contracted rates and assess whether or not you are being “under reimbursed”
Objectively assess in network versus out of network reimbursement

3. Typical Practice Revenues5%
40%
55%

4. Preparing for Negotiations: 50% or more of your time is spent here!
AGENDA
Preparing for Negotiations: 50% or more of your time is spent here!
Preparing for Negotiation: doing your homework
Data Gathering
Benchmarking
Existing Fee Schedule
Billed Charges
Analysis
Out of Network Modeling
Negotiation Strategy

5. Question?
1) If we have two CPT codes, which is of Medicare, including patient co-payment, by the payer, at $1600/service and code which is of Medicare, including patient co-payment, by the payer, at $60/service and is performed 100 times a year and is performed 1000 times a year,
What is the weighted average reimbursement if these are my only two codes?
What is the average reimbursement?
Why is it different and which calculation most accurately reflects the reimbursement to my practice?

6. Contracts Negotiations Process
Data Analysis
Proposal Letter
Make Initial Contact with Payer
Analyze Counter
Negotiate until agreement is reached
Escalate to Sr. Level Manager
Consider Out of Network Option
Monitor Claims
Re-Negotiate
Phase 1:
Prepare
Phase 2:
Negotiate
Phase 2:
Continue to Negotiate
Phase 3:
Monitor / Re-negotiate
Negotiations
Completed

7. You are here Data Analysis Proposal Letter
Process – Phase I
You are here
Data Analysis
Proposal Letter
Make Initial Contact with Payer
Phase 1:
Prepare

8. If you don’t know where you are going, any road will get you there.
Proposal Letter
If you don’t know where you are going, any road will get you there.
– Lewis Carroll
A well prepared proposal letter serves as a roadmap for negotiations
Two Sections
Letter Body – the narrative that makes the case for your practice’s value to the payer network.
Fee Schedule Proposal – the result of your analysis that details your requested reimbursement rates for your new fee schedule

9. Most accept these agreements and are underpaid, by a lot
Consider this…
Practices have about 50%-70%% of their revenues determined by payer allowables on in-network agreements
Most accept these agreements and are underpaid, by a lot
Using tools like RevolutionSoftware and analytical techniques can increase revenues
Great Practice Management will optimize revenue you are entitled to. Great contracts negotiations will create more revenue

10. = + Completing the Practice Management Revenue Cycle
Complete Revenue Cycle
Practice Management +
Payer Contracts Analysis = =
Are my reimbursements maximized? Should I stay in network? Are my contract terms favorable? Are my billed charges high enough?
Scheduling
Coding & Billing, Collections
Cash Flow

11. Practice Management Revenue Cycle
DOQ/IT Reporting
Clinical Patient Trends
Cash Flow Management
Scheduling
Coding & Billing, Collections
Cash Flow
Operational Business Management
Operational Reporting
Payer Contracts Analysis and Negotiations
Practice Analytics
Practice Management Systems
Informational
Operational
Are my reimbursements maximized? Should I stay in network? Are my contract terms favorable? Are my billed charges high enough?

12. RevolutionSoftware™ Cloud Service
Payer Fee
Schedule(s)
Charge
Master
More Profitable Contracts
More revenue via Charge Master Adjustment
Better data to negotiate with
Quickly identify patterns in your data to increase revenue
Other options: Out of network
Cloud Service
Benchmarking Payer Rates
Compare any two payers,
Payer Comparisons
Contracted rates vs. Actual Payments
In Network vs. Out of Network Analysis
Billed Charges Analysis
Inputs:
Analysis:
Results:

13. RevolutionSoftware™ Learning Session
How to get data into RevolutionSoftware and Using Benchmarking Reports
Payer Comparisons Analysis and Claims Analysis
Business Models (Out of Network and Billed Charges Modelers)
How to prepare an “Aggregate Payer” to compare your contracted rates across payers to make negotiations decisions
Fee Schedule Proposal Options

14. What should we ask for? Go back to the payer with a counter proposal:
E and M up 40%
Pathology up 30%
Radiology if below 120%, then up 40% (77014, 77418, 77427)
All other up 15%, including codes not priced as a PCT of Medicare
Codes 52000, 55250, and add $200 for in office based incentive (In addition to the 15% increase proposal)
Note: left out due to unusually high reimbursement

15. Question / Scenario…
Two practices merge, Practice A and Practice B, into a new practice, named Practice C.
Prior to the merger, Practice A had an PPO agreement with Payer 1 that paid, in network, $1,000,000 the 12 months just before the merger. Their overall weighted average rate of reimbursement with Payer 1 is 100% of Medicare.
Prior to the merger, Practice B had an in network PPO agreement with Payer 1 that paid $200,000 the 12 months just before the merger. Their overall weighted average rate of reimbursement with Payer 1 is 120% of Medicare.
Practice C has decided to remain in Payer 1’s network, as long as their total group reimbursement with Payer 1 increases in aggregate. After a long and difficult negotiation with Practice C, Payer 1 made a final offer of 108% of Medicare, down 12% from Practice B’s current reimbursement. Assuming that, in the absence of change, revenues will remain constant, should practice C accept this new and final offer from payer 1?
Yes No
And Why?

16. “Across the board request”

17. “Define your fee schedule”

18. Why is this important? MAKE MORE MONEY!
Benchmark payer agreements to other providers and to other agreements that you have with similar code mixes in your locality to:
Determine which payer contracts to renegotiate
Determine which payer contracts to terminate and go out of network
Determine how much to ask for by agreement and by code or specialty groups, e.g., E and M, Surgeries, Labs etc.
Compare out of network option vs. in network to maximize profit by agreement
More out of network revenue by updating your chargemaster to reflect UCR rates
Don’t allow yourself to get bitten by the “lesser of” language
MAKE MORE MONEY!

19. Summary
We covered how review and analyze your existing fee schedules to prepare for negotiations
We covered how to use tools and techniques to flow new revenues into your practices

20. Homework (Your Analysis)
Register for RevolutionSoftware at using the promo code class2015 (If you have not done so yet)
Prepare your csv files using the templates on the class webpage (one chargemaster and your payer file(s))
Load your data and produce your benchmark report
Your homework assignment and downloadable documents can be found on the class webpage at

21. If you have questions or need help…
RevolutionSoftware™ Questions
Regina Vasquez, Sr. VP of Accounts – Healthcents, Inc.
Tel: (719)
Healthcents, Inc. Corporate
Susan Charkin, President – Healthcents, Inc.
Steve Selbst, CEO,
Healthcents Inc. Tel: (800)

22. If you have questions… RevolutionSoftware Registration and Questions™
Regina Vasquez, Sr. VP of Accounts – Healthcents, Inc.
Tel: (719)
Class Help: or
Healthcents Inc. Headquarters:
Susan Charkin, President, Steve Selbst, CEO, Healthcents, Inc.
Tel: (800) or