Payors are struggling to manage contracts that vary from facility to facility, from procedure to procedure, with significant deviation within each contract. The situation is likely to become exacerbated by bundled payments, escalating regulation, and evolving reforms.
Taking contracts and associated claims from negotiation to adjudication has never been more complex.
Payors struggle to manage contracts that vary from facility to facility, from procedure to procedure, with significant deviation within each contract. These highly complex agreements are usually negotiated by hospital administrators and lawyers, and are frequently expressed in phrases that must then be interpreted by the operations staff and put into precise terms that can be executed by claims systems or processed manually by claims staff.
This is a daunting task as these terms are typically highly nuanced. For example, a policy may state: “If an ER visit turns into an inpatient stay, the health plan will be billed only for the inpatient stay.” The burden then falls upon the operations staff to determine if this applies to an inpatient stay that follows an ER visit within 24 hours. What about 36 hours? What if the stay becomes an observation visit? Who decides?
Payment Systems Pushed to the Breaking Point
Today’s contracting processes and claims systems are being pushed beyond their stated purpose and designs. Many health plans use legacy systems that were implemented during simpler eras, when payors dealt with one claim at a time. Even some updated systems lack the flexibility to handle changes to standard plan policies, enforce new complex policies, and make appropriate connections between separate claims that should be grouped.