Industry Insights

Part Three - Utilizing Accurate Data to Drive Payer Negotiations

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Transcribed Video Content Below

Robby: So as we get into payer negotiations, we, again, have more dashboards here. But what we really want to start with is truly understanding our overall contract value as proposed. So here we have a simple dashboard that allows me to compare my existing baseline contract against Medicare, against the proposed rate structure. And I can see how they compare against each other. I can drill into the outpatient, see by service line where the impacts are coming from, but this really does give me a sense of, at a high level, how they are performing.

Another way we could actually look at this is, instead of comparing Medicare, is we can start comparing our baseline, say Aetna contracts, against what are Blue Cross maybe for the same patient population and then against our proposed rate structure. So you can start really comparing commercial payer to commercial payer rather than just commercial payer to Medicare rates. And that really allows you to start grading the different payers against each other and see how they stack up.

So we talked about drilling in and understanding the impact at the service level. We can also start understanding the impact at the outlier or add-on level. Here's the Outlier dashboard. Here we're seeing in the overall impact and where our outliers are coming in from inpatient versus outpatient. We can then drill in even further to understand the different service levels that are driving out the outlier payments. So we can see the big impact is really coming from inpatient surgical. And if I wanted to keep drilling in here, I could go all the way down to the DRG level or even the patient level to see what DRGs and what patients are driving my outliers within that contract.

You now highlight the dynamic reporting here. I wouldn't be able to drill into this data as quickly, and would probably be running those two, or three, or four different reports to get to these answers. But when you're negotiating contracts, you don't have a lot of time to wait for reports, so dynamic reports become very useful in this process.

And the last report we'll go over...as we're talking about negotiations and simulating contracts, is this dashboard that allows us to really understand, where my existing contract is today my baseline, so 51.6 million. The real value once I take out the bad debt and the denied expected reimbursement is 48.8 million. Same with Medicare, started with 48.7. It goes to 46.0. And then the proposal, this is the interesting part. Is with my proposal, it's jumping up to 52.2. My denied expected reimbursement is 0.78 making my overall total contract value is 49.4. This will allow me to start moving some of this denied reimbursement that I mentioned earlier, taking some of the denied reimbursement that we've allocated in our negotiation process and shifting that to services that are paid a little bit more frequently or denied less frequently so that we can maximize our revenue and maximize the value of our contracts.

So as we talk about negotiations, now we're going to move into rate setting and charges. When you're assessing proposed charge increases, it's important to have the ability to dig and truly understand the impact of the charges. So on this dashboard, on the left-hand side, we have prior year net revenue, and then we have the revenue walk that shows us, by payer, how much of an increase we're getting over last year's reimbursement. And then we can see, on this right chart, what percentage are they increasing. The bigger the dot, the more a higher percentage revenue contributions to my overall revenue they are. So the more relevant those payers are to me.

So projected change by payer is a big thing, and being able to drill into it at different levels, is going to be important. But we also need to understand the charges more at detailed level as well by service areas. So we can see by service area, and then we can get into the overall charge code impact or the detailed charge code impact as well.

Understanding the charge impact or the reimbursement impact of charges at the high-level payer summary level is important as well as understanding the detailed approach so that you can really start assuring that your proposed rate structure is going to deliver on your expectations. It's a very detailed process, but being able to roll it up is going to be key to understanding it and making sure that you hit your goals for the coming year. So you'll need to be able to pivot from a high-level summaries to the chargemaster detail to the market rate analysis, and payer summaries very quickly.