subject: Medical Billing- Health Plan Contracts [print this page] The troubled economy has impacted the revenues of health care insurance companies. For example:
Blue Cross Blue Shield reported a 41% net income drop in 2008
WellPoint's membership dropped by 1 million in 2009 over 2008
Aetna, Coventry Health Care, and HealthNet all reported declining income in Q2 2009
Unemployment, investments and declining government reimbursements have been cited as the reasons for the decline.
However, income rose for Humana, United Health Group and Cigna.
Provider Profits
While income results have been mixed for the sector overall, there's one measure of company health that has been constant. Every publicly traded insurer posted profits through the first half of 2009.
What's one way to maintain profitability in the midst of declining revenues? Cut expenses. One way to do that is to pare down the fees paid to doctors. In fact, a survey conducted by Physicians Practice, suggested that all physicians took an E&M pay cut in 2009. Based on the survey responses (1,027), the 9% fee reduction taken by primary-care physicians was the most dire. The cuts seen by medical specialists tended to be lower.
Strategies to Protect Yourself
Make sure you understand what your health plan contracts actually say. It's not as onerous a chore as you might think. An effective approach is to track the 20 to 30 CPT codes that comprise 80 to 90 percent of your business. If the income from those codes is decreasing, check your contract. If you notice that a new contract includes a decrease in reimbursements under your key codes, bring it to the attention of your health plan representative. You may get it changed.
Be wary when health plan companies boast about new rate increases that average out higher than what you receive from Medicare. Dig into the fee schedule. What you may see is that some of the codes you use the least have been increased to 150 percent of the Medicare rate. However, the codes you use the most are at 105% of Medicare plus they're decreased from the prior contract! It averages out higher but actually means less revenue for your practice.
Watch out for companies who base their rates on the prior year's Medicare fee schedule instead of upgrading the fees to the current schedule.
Negotiate with health plan firms. If you do something better in your practice than a competitor bring it up. For example- you could be expanding your hours of operation, increasing your patient flow and be a more precise follower of clinical guidelines.
Understand and then prove your worth to your payers.
