Time to Update Your Contracts
As most of you know by now, 2007 Medicare reimbursement is flat or decreasing for many physicians; however, ED Physicians will see a long-overdue increase. Although the conversion factor did not change, the change in the RVU values for our Evaluation and Management codes (99281-99291) will yield an increase to all but 99283. For many of my clients, these changes represent about a 7% increase in income from Medicare. My question is to you is why stop at Medicare? The answer is you shouldn't.
Game Plan
At the first of each year, it is a very good practice to evaluate each of your managed care contracts. Review your trend data on reimbursement rates overall and by CPT code, E&M code utilization, denials, payment amounts (to verify they are paying you what they have contracted), and the term of your contracts. Many of these managed care companies have very flawed payment systems that do not pay you the rates contracted. Furthermore, many of these contracts contain automatic term rollover provisions at previous rates or the ability to modify your rates with a short notice. These contracts can be dangerous if not monitored very closely.
For many of you, your managed care contracts are tied to Medicare rates. Since our rates increased this year, your other contracts should theoretically see increases. Not so fast. The game in the Managed Care Plan industry is to delay or not update when rates change citing the cost and time involved. This is simply a lame excuse that is a cover for the real reason: Money . Every CPT code and/or client contract not updated to the new RVU's and/or allowables can mean huge dollars to the insurance company. Many of the large insurance companies have recorded monster profits the last few years. Their CEO's have made enormous salaries and bonuses. You should demand that they all update their payment to reflect the new RVU's associated with our E&M codes if your contracts are tied to Medicare. Make them retroactively correct the payments to January 1, 2007 dates of service so that you are not short changed.
If your contracts are not tied to Medicare rates, I would review your terms and look to make changes that reflect the increased RVU's and costs associated with practicing Emergency Medicine. Since the passage of the “Prudent Layperson” definition of an Emergency, I have found that many of these carriers are more willing to negotiate rather than give you the take it or leave it contract offers experienced previously. The golden rule in our business is “You won't get the gold unless you ask”. If you need assistance, consult one the many industry professionals. Every day you wait to evaluate your contracts, you have a potential opportunity cost. Good luck with negotiations.