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Contracting and Billing Tips

May 2017

CRE TA Center

Tips for Ryan White HIV/AIDS Program (RWHAP) recipients and sub-recipients on ways to improve contracting and billing processes. Tips are presented in sequential order but can be applied at variable points in time.

When initiating contracts with either private health insurance companies or public payers like Medicare and Medicaid, be sure you have your organization's legal information ready. First and foremost, this means knowing your LEGAL BUSINESS NAME and official TAX ID.

  • Request a 147c Letter from the U.S. IRS - The department or organization you work for - as shown, for example, on office stationery - may not be the Legal Business Name. The best way to ensure that you know your organization's Legal Business Name and Tax ID is to contact the U.S. Internal Revenue Service for a 147c letter. Whatever is listed on this document is your Legal Business Name and Tax ID, and must be used in Contracts
  • Confirm Your 147c Letter and W-9 Match - After verifying your Legal Business Name and Tax ID, you may also want to confirm the information provided by the IRS in the 147c letter is the same as the information shown on your W-9 form, and other related documents.

HHS's Centers for Medicare & Medicaid Services (CMS) has developed the National Plan and Provider Enumeration System (NPPES) to assign national provider identifiers (NPls), unique 10-digit codes to identify both healthcare organizations and individual providers.

Whether you are establishing or expanding contracts or billing with Medicaid and Marketplace Insurance Plans, verifying your information in NPPES now can prevent problems with contracting and billing later. Inconsistent information can lead to delayed applications for insurance contracts.

  • Verify Your Organization's National Provider Identifier (NPI) - Make sure that the organization name is the same as the legal business name. A common mistake is that the name listed in the NPI is not the organization's legal business name.
  • Verify Your Organization's Physical Address and Taxonomy Code - Ensure that your organization’s physical address and taxonomy codes are correct. For example, a health department’s primary taxonomy code should be listed as public health or welfare not behavioral health.

Remember, staff providing direct services to clients for which you plan to bill insurers need an individual NPI in addition to your organization NPI. Be sure to verify their information as well!

There are two main types of contracts that providers can set up.

  • Group Contract - Contract with an individual provider at your organization who oversees other staff providing direct services to clients, usually a medical director or health officer. The contract is in the name of this person; individuals providing services at the organization would still need to be credentialed and have their National Provider Identifier (NPI).
  • Organization Contract - Contract with your organization and not an individual provider. You can easily add individual providers within your organization to the contract; however, in some states you may need to credential all of your individual providers before the insurer will contract with your organization. This contract type allows you to avoid having to get a new contract if the person named in the group contract leaves. When contacting an insurer, ask them if you can have an ancillary or location-based contract.

Contact the insurer to learn more about what the requirements are for the type of contract your organization is seeking. Remember, most health insurers maintain provider websites that summarize the contracting and credentialing process and provide commonly used forms.

After contract negotiations, your agency will receive a contract for signature. The contract should be reviewed by the appropriate leadership and legal counsel before it is signed to ensure that the contract terms are clear and acceptable. Contract terms are the specifics that outline roles, requirements, and responsibilities assigned to the insurer and your agency. Here are some contract terms to be sure to review.

  • Billing Codes - Some contracts include specific Healthcare Common Procedure Coding System (HCPCS), Current Procedural Terminology (CPT) or International Statistical Classification of Diseases and Related Health Problems (ICD) 10th Edition codes that will be covered for payment. Review these codes to ensure that the codes your agency bills most frequently are listed. Ask your insurer to add any missing codes.
  • Payment Models - Understand the contract’s payment model and what it means for cost-sharing, financial risk, and payment. Two common types of payment models include fee-for-service (FFS) and prepaid capitation payments.
    • FFS - The fee schedule should be included in the contract or a source should be referenced, such as a document posted on the insurer’s provider website. If not, request that the contract be revised to include a reference to a specific fee schedule.

    • Capitation - A fixed payment per patient per unit of time (usually per month) paid in advance for the delivery of healthcare services. The payment amount, as well as frequency of payment, should be included in the contract.

  • Filing Terms - Ensure your agency is aware of and can meet the requirements for claims to be submitted for payment.
  • Medical Necessity - Determine how the insurer defines medical necessity and under what circumstances the insurer must assess and determine if the requested procedure meets the criteria for medical necessity.
  • Prior Authorization (PA) – Review in what circumstances PA is required, necessary documentation and the process for submission.
  • Excluded Services - Review services that the insurer does not cover. If the excluded services include services your agency provides, check to see if they can be added to your contract. Remember, services may be excluded due to lack of coverage, such as with some Medicaid programs.
  • Appeal Process - Be sure that you understand the appeal process. The appeal process includes the period in which an appeal must be filed and where appeals should be sent. Even if not specified in the contract, send a copy of the Explanation of Benefits (EOB) showing the original payment, documentation of services provided, and the payment amount specified in the fee schedule. Confirm receipt of the appeal materials by the required deadline.

Understand and review your contract terms in order to ensure you are familiar with coverage and various contract terms. This review is part of the process of optimizing revenue from contracts.

  • Review your contracts - Identify coverage, payment arrangements, claim filing deadlines, and other important contract terms.
  • Check updated insurer’s fee schedules - Ensure that claims are completed correctly.
  • Confirm claims are submitted to the correct location – Verify that you have the correct website or physical address.
  • Follow-up on denied claims - Research, correct, and resubmit denied claims.
  • Ensure your billing staff follow these requirements – Educate your billing staff about the contract terms and routinely check to ensure that the requirements are addressed.

Inform your clients and the community about the health plans you accept in order to optimize billing revenue.

  • Post the information in waiting, examine rooms, and website – Ensure that the names and logos of insurance plans in which your agency participates are clearly visible.
  • Plan promotional activities in open enrollment periods – Identify key tools and strategies to disseminate messages to both existing and potential new clients.
  • Check your provider organization listing – Verify that your organization’s clinicians are accurately listed on websites of the insurers' provider networks in which you participate.

First, verify client health insurance enrollment to improve your charge-to-collection ratio. Then, submit claims.

When it comes to verification, use health insurers’ electronic eligibility verification systems before scheduled visits to identify termination of enrollment or other changes. Then contact the patient before the visit to identify new insurers and request the patient to bring in their new insurance cards. Insurance enrollment should also be checked at the beginning of the calendar year, as many patients have new insurance plans, co-pays, and deductibles.

Before the Visit

  • Ask the client about changes in insurance when the appointment is made. Ensure that your staff know in which plans your agency participates.
  • Use your EHR or billing software to check enrollment, deductibles, and co-payments at least one day before the visit.

During the Visit

  • Confirm the insurance to be billed.
  • Obtain a copy of insurance card.
  • Inform the client of co-pay requirements.

Ensure that the claim submission is a routine part of your organization’s revenue cycle will help maximize reimbursement.

  • Be timely - Daily claims submission may be necessary for busy healthcare practices. If you are using a billing service or contractor, ensure that they are submitting claims in a timely manner. Claim submission should be a routine part of your revenue cycle.
  • Optimize your billing software – Become more familiar regarding features available in your billing software to make claim submission easier. Ensure that your staff are adequately trained to use the software.
  • Use ERA when available - Many insurers now use Electronic Remittance Advice (ERA) to transmit information about accepted and rejected claims. These ERA processes allow healthcare organizations to post payment information automatically and quickly identify and address denials to make required corrections.

A reality of billing is that not all claims will be paid by the insurance provider with the initial submission. Below are tips on determining why claims were denied so you can both contest denials and improve future billings and reimbursements.

  • Track all claims to know the reimbursement status of the claim, including when a claim has been denied.
  • Determine the reason for the denial so you can resubmit claims to obtain reimbursement and help identify patterns in claim denials and areas for improvement in your submission process.

Plan for deadlines as you close out of billing to ensure that you optimize reimbursement.

  • Check the year-end claim submission deadline for insurers with which your agency contracts.
  • Check your own organization’s deadline for posting year-end billing.
  • Alert your staff to ensure that all claims are processed and submitted by the deadlines.
  • Don’t forget to review previously rejected claims, make necessary corrections, and resubmit so they can still be reimbursed.

Know your return on investment with each insurer in order to help inform contract negotiations and optimize revenue from your contracts. This review can also identify the need for alternative payment strategies or possible issues in your revenue cycle management.

  • Calculate your return on investment from contracting – For each insurer, assess to what extent reimbursements are covering your agency’s costs.
  • Compare reimbursements by services and billing codes – Review reimbursements to determine if there are specific services or billing codes for which agency costs are not covered or insurers are not reimbursing.
  • Determine reasons for claim rejections – Review Remittance Advice transmittals to identify key factors contributing to claim rejections.
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