Contacting: RESPONSES
Randy McFarland
Description
Collection
Title:
Contacting: RESPONSES
Creator:
Randy McFarland
Date:
8/1/2003
Text:
ORININAL POST:
I have been lazy during the past few years because of instead of sending
our customary fee schedule (when procuring contracts), I have quoted
some percentage related to Medicare profile, because that's what was
requested by the MCO.
It is becoming apparent that directly tying my fees to Medicare rates
in a contract may be a mistake, because if (or when?) Medicare decides
to lower its rates, virtually ALL of my contracts would be immediately
impacted.
Question: Wouldn't it be smarter of me to use our customary fee
schedule as the basis for negotiation? This way, since nothing in the
fee schedule or the contract referenced Medicare rates, the contract
wouldn't be subject to an arbitrary Medicare profile reduction. This
would effectively diversify my contracts so they are not globally
effected by a Medicare reduction.
Thanks,
Randy McFarland, CPO
Fullerton, CA
RESPONSES:
Yes. The major concern is if Medicare converts to or uses competitive
bidding rates for all reimbursement guidelines.
I would agree that if you have the flexibility in your contracting to
negotiate away from a Medicare fee schedule base, that using your
customary fees is perfect. Keep in mind, however that you should be
prepared to justify those fees, for example, by a cost accounting.If you
build in increases, you should be able to substantiate those as well.
Also, take in to consideration the scope of the network, competition,
and other terms of the contract, particularly with TPA's.
Another wise tactic would be to tie the discount of your usual an
customary prices to a timely payment. ie 3 weeks processing with a
clean claim. Another negotiating point is also standard documentation
required with a clean claim. It is all about getting your claim
processed and knowing ahead of time what is required of you. If you
meet these requirements and they don't pay you in the time agreed upon
in the contract then you can invoice for late payment. on a $80000.00
worth of claims, this can add up.
I would be VERY interested in knowing if any MCO would even entertain
the
idea of allowing you to contract with your customary fee schedule. My
experience is that our industry shot itself in the foot about 10-12
years ago and now
MCO's standardly rely on Medicare's Allowables to level the playing
field.
It would be more than smarter if you could re-negotiate your
contracts using your customary fee schedule. It will ultimately protect
you from
Medicare lowering your reimbursements under their new Inherent
Reasonableness.
We haven't even begun to see how that's going to shake out..
I would be extremely interested in what type of response you receive
from
your MCO's. Sounds like you'll need to employ some good
strategy/language,
please share with the class if you can.
We've thought of that too because our contracts are written that way
also. What we've discussed doing is rewriting our contracts based upon
the 2003 (or later) fee schedule then allowing for some percentage
increase each year.
I have been lazy during the past few years because of instead of sending
our customary fee schedule (when procuring contracts), I have quoted
some percentage related to Medicare profile, because that's what was
requested by the MCO.
It is becoming apparent that directly tying my fees to Medicare rates
in a contract may be a mistake, because if (or when?) Medicare decides
to lower its rates, virtually ALL of my contracts would be immediately
impacted.
Question: Wouldn't it be smarter of me to use our customary fee
schedule as the basis for negotiation? This way, since nothing in the
fee schedule or the contract referenced Medicare rates, the contract
wouldn't be subject to an arbitrary Medicare profile reduction. This
would effectively diversify my contracts so they are not globally
effected by a Medicare reduction.
Thanks,
Randy McFarland, CPO
Fullerton, CA
RESPONSES:
Yes. The major concern is if Medicare converts to or uses competitive
bidding rates for all reimbursement guidelines.
I would agree that if you have the flexibility in your contracting to
negotiate away from a Medicare fee schedule base, that using your
customary fees is perfect. Keep in mind, however that you should be
prepared to justify those fees, for example, by a cost accounting.If you
build in increases, you should be able to substantiate those as well.
Also, take in to consideration the scope of the network, competition,
and other terms of the contract, particularly with TPA's.
Another wise tactic would be to tie the discount of your usual an
customary prices to a timely payment. ie 3 weeks processing with a
clean claim. Another negotiating point is also standard documentation
required with a clean claim. It is all about getting your claim
processed and knowing ahead of time what is required of you. If you
meet these requirements and they don't pay you in the time agreed upon
in the contract then you can invoice for late payment. on a $80000.00
worth of claims, this can add up.
I would be VERY interested in knowing if any MCO would even entertain
the
idea of allowing you to contract with your customary fee schedule. My
experience is that our industry shot itself in the foot about 10-12
years ago and now
MCO's standardly rely on Medicare's Allowables to level the playing
field.
It would be more than smarter if you could re-negotiate your
contracts using your customary fee schedule. It will ultimately protect
you from
Medicare lowering your reimbursements under their new Inherent
Reasonableness.
We haven't even begun to see how that's going to shake out..
I would be extremely interested in what type of response you receive
from
your MCO's. Sounds like you'll need to employ some good
strategy/language,
please share with the class if you can.
We've thought of that too because our contracts are written that way
also. What we've discussed doing is rewriting our contracts based upon
the 2003 (or later) fee schedule then allowing for some percentage
increase each year.
Citation
Randy McFarland, “Contacting: RESPONSES,” Digital Resource Foundation for Orthotics and Prosthetics, accessed November 2, 2024, https://library.drfop.org/items/show/221552.
