Wiki Reimbursement rule for most managed care contracts or commercial payors? Help please.

[keishamarie]

Hello all! I am working on my first audit for a hospitalist group that stretches across the U.S., and although we have the Medicare, and some of the Workers Compensation contract rates, we are now left with getting a general price across the board for the commercial carriers. I do understand that facilities can and will have their own contract with the carrier, but the people heading this case are wanting a general rule of thumb to look at(like expected reimbursement would be generally 120% of CMS allowable), and be able to come up with a number that the group would have most likely been paid. I appreciate any insight, or direction that can be shared with me. I know this forum is filled with years and years of experience and expertise, and I want to say thank you in advance for any and all help I can get!

 

[thomas7331]

I don't know of any way to come up with a meaningful number for this given the limited information you've provided here. If these providers are practicing all over the country, then you are looking at very different markets with different demand, patient populations and payer mixes, so I'd expect to see a wide divergence in contract rates and reimbursement across this group. I'd note that even your Medicare and Medicaid rates are going to vary from state to state, since those rates are adjusted based on practice expenses and malpractice costs in the particular localities, so even if you used a percentage of the Medicare as your rate, then you would have to ask 120% of which state's Medicare?

It's not really clear to me what is the goal or purpose of having such a 'rule of thumb' number for such a large group - are they looking for guidance on coming up with a fee schedule or a way to broadly estimate payments for the group as a whole? Since it sounds like perhaps you are being asked to come up with a number that is an average of reimbursement rates for the group, not considering these variations by payer or location, my suggestion would be to just look at your existing reimbursement data for these providers. If you can have someone query the billing database for paid claims in the last 6 months for the top 10 or 20 most frequently billed CPT codes, for example, you may be able to calculate an average allowable per CPT code and do a comparison of those fees paid against a particular Medicare fee schedule and use that information as your baseline for estimating payment.

Hope this might help some, or if you can give some more detail about why this information is needed or how it is going to be used, perhaps we might be able to give a little more guidance.

 

[keishamarie]

I don't know of any way to come up with a meaningful number for this given the limited information you've provided here. If these providers are practicing all over the country, then you are looking at very different markets with different demand, patient populations and payer mixes, so I'd expect to see a wide divergence in contract rates and reimbursement across this group. I'd note that even your Medicare and Medicaid rates are going to vary from state to state, since those rates are adjusted based on practice expenses and malpractice costs in the particular localities, so even if you used a percentage of the Medicare as your rate, then you would have to ask 120% of which state's Medicare?

It's not really clear to me what is the goal or purpose of having such a 'rule of thumb' number for such a large group - are they looking for guidance on coming up with a fee schedule or a way to broadly estimate payments for the group as a whole? Since it sounds like perhaps you are being asked to come up with a number that is an average of reimbursement rates for the group, not considering these variations by payer or location, my suggestion would be to just look at your existing reimbursement data for these providers. If you can have someone query the billing database for paid claims in the last 6 months for the top 10 or 20 most frequently billed CPT codes, for example, you may be able to calculate an average allowable per CPT code and do a comparison of those fees paid against a particular Medicare fee schedule and use that information as your baseline for estimating payment.

Hope this might help some, or if you can give some more detail about why this information is needed or how it is going to be used, perhaps we might be able to give a little more guidance.

Thank you for your response. So I am only allowed to share limited info right now, that's why I am so vague about this since this is a deposition case I am working on. The attorney's are wanting us to get a general number for the accountants to have a figure/formula to go and work with on the claims that are not straight Medicare, Medicaid, and Work Compensation. Yes we understand that each state is different, and contracts would pay at a different rate, but at this point they are wanting to get a general way to calculate possible damages (though they know there is a lot). We have the self pay, Medicare, some of the states WC reimbursement rates, I hopefully can hunt down the Medicaid allowable amounts, but I am trying to get a general figure for all the commercial payor accounts. Yes some had case rates, and they will have to get that from the hospitals point of contact, but I am just trying to get them a figure to go on here. Again, I appreciate any and all help/guidance you can give.

 

[sls314]

You'd really need to get copies of the reimbursement exhibits from their managed care contracts to be useful.

If getting that information for all of the contracts is too cumbersome, I'd suggest getting it for the top 5 payers. Most likely that makes up the biggest chunk of their volume, and you can use it to estimate for the smaller payers.

I've worked in healthcare reimbursement for 20 years. A general figure without looking at contracts isn't very useful. It can vary widely from payer to payer, region to region.

 

[sls314]

Thank you for your response. So I am only allowed to share limited info right now, that's why I am so vague about this since this is a deposition case I am working on. The attorney's are wanting us to get a general number for the accountants to have a figure/formula to go and work with on the claims that are not straight Medicare, Medicaid, and Work Compensation. Yes we understand that each state is different, and contracts would pay at a different rate, but at this point they are wanting to get a general way to calculate possible damages (though they know there is a lot). We have the self pay, Medicare, some of the states WC reimbursement rates, I hopefully can hunt down the Medicaid allowable amounts, but I am trying to get a general figure for all the commercial payor accounts. Yes some had case rates, and they will have to get that from the hospitals point of contact, but I am just trying to get them a figure to go on here. Again, I appreciate any and all help/guidance you can give.

We cross-posted.

For your Medicaid, most states have their fee schedules available on the state Medicaid website. You should be able to find those. I used to have to pull them annually for 24 states when I worked for a large provider organization and would have to enter the data in a program to calculate estimated reimbursement on accounts.

I did the same in those 24 states for commercial payers, but I had the managed care contracts to work from because we were looking to calculate specific expected reimbursement. There's so much variation in what's typical for state to state.

I will have to ponder what I might suggest to you for your needs. (A percentage markup from Medicare may work as a rough estimate of damages, but it would definitely be better if you could use the specific percentages from their top 5 payers or so.)

 

[thomas7331]

I agree, without looking at the providers' contracts and payer mix, it's almost impossible to know how commercial plans will pay. It would be like pulling a number out of a hat, honestly. There are even some commercial plans that reimburse a percentage of billed charges, in which case there is no fee schedule to tie the claims to at all.

 

[keishamarie]

We cross-posted.

For your Medicaid, most states have their fee schedules available on the state Medicaid website. You should be able to find those. I used to have to pull them annually for 24 states when I worked for a large provider organization and would have to enter the data in a program to calculate estimated reimbursement on accounts.

I did the same in those 24 states for commercial payers, but I had the managed care contracts to work from because we were looking to calculate specific expected reimbursement. There's so much variation in what's typical for state to state.

I will have to ponder what I might suggest to you for your needs. (A percentage markup from Medicare may work as a rough estimate of damages, but it would definitely be better if you could use the specific percentages from their top 5 payers or so.)

Thank you! I will make sure to share. And forgot to ask for the states that do not have a fee schedule posted for Workers Compensation, what rule of thumb would one go by to calculate those? Thank you for sharing your knowledge in this with me. It means a lot!