Processing reimbursements has always been a challenge. Many of the practice management software solutions will say they have this functionality built in, but by and large, I’ve never seen it effectively work. Generally, if it’s part of the practice management system, the responsibility of identifying underpayment often falls to the person who is posting the payment in cash apps.
We think it is important to purchase software that allows you to load your contracts into the practice management system. This type of software generally comes at a relatively low investment, and can be interfaced with any practice management system. This will allow you to easily look and compare then reimbursement for all E&M codes, consults, procedures, and surgeries, to identify underpayment.
In our first year of employing this software on behalf of our clients, we identified over a million dollars in underpayments. That is a lot of money.
We have also become more familiar with this technology, and realize that it’s not uncommon when a renewal date on a contract changes, that the payer internally changes the reimbursement. For example, we just recently renewed a client, renewed a contract with a payer and the reimbursement that was negotiated prior was extended for another year. Within 60 days, we started to see underpayments occur systematically on the payer’s side. We don’t know if they go and implement a low fee schedule when a contract renews, but it’s something for all of you to be aware of and pay attention to as you manage your contracts. We have found when we’ve taken this information on behalf of our clients to the payers, the payers acknowledge and have, without a tremendous amount of challenge, made our clients whole.
Remember, insurance companies have many disparate systems. They update one system, but another might not be updated. At a time when contract renewals occur, they could load in the wrong fee schedule, and if you’re not paying attention, you are now all of a sudden getting something different than what you’ve expected. This is when we go in with a demand letter. These are not appeals, as this has nothing to do with the claims process, this is a demand letter saying, “Our contract stipulates this payment for this service. You’ve paid us this. Here’s the difference, please send it to us.”
Fortunately, we are usually able to recover the payment with little argument. More importantly, we find that when insurance companies know that we’re watching they’re going to pay more attention as well.