7 Ways To Understand Your Third-Party Payer Contract
The Important of Understanding Third-Party Payer Contracts
In the context of third-party billing, we believe that it is extremely important for providers to obtain reimbursement for their services within a reasonable amount of time. We also understand the necessity for third-party payers to have the chance to thoroughly scrutinize their responsibility in the payment of the claim and decide if the services provided are truly necessary.
According to the golden rule for third-party billing, there is no obligation to guarantee coverage or any other liability in the event that coverage lapses due to the third party’s failure to submit payment by the due date. Simply put, if a charge is not documented, you can not bill for it. When it comes to private payers, it’s important to understand your third-party payer contract to avoid any lapses in reimbursement.
Seven Tips To Understand Your Third-Party Payer Contract
- Know your rights. To avoid delays in payments that would cost you, be sure that you understand your rights when speaking about a contract and request a better explanation of the insurance provider’s payment schedule language if you don’t understand.
- Define payment period for clean claims. Always make sure that there is a clause that holds the health plan responsible for paying any claims within a specific period of time. Without this clause, there’s no obligation on the part of the health plan to pay the claim within a reasonable amount of time. During this step, make sure you ask for clarification on what a payer deems as a clean claim, and if there are additional requests for information that is considered reasonable.
- Define payment period for unclean claims. Make sure that you have a firm definition of the timeframe in which the health plan can return a claim as unclean. This will help avoid the health plan from holding unclean claims to delay any payments. The contract should also specify how much time will be allowed to review this additional information before any payments are made.
- Address claims considered “not to file.” Your contract should require the health plan to acknowledge receipt of an electronic claim within 24 hours of receiving it. Failure to be acknowledged, the health plan should be contracted and the claim resubmitted. If the health plan states that they never received a claim, you’ll be able to provide documentation of the original file date. You will also require that they pay within the guidelines that were stated in the contract.
- Identify penalties. List what penalties are to be addressed when the health plan does not pay according to prompt-payment guidelines. State that participating provider discounts be waived and the health plan will be liable for 100% of billed charges plus interest. If not attainable, the health plan should be obligated for payment of the claim plus pre-set interest.
- Protect your payment. Your contract should specify that all payments made are considered final unless the provider receives a written request within a specified period of time after receipt of payment.
- Perform regular reviews. Always be sure to review your contracts regularly as most contracts have an automatic annual renewal. Check with your state regarding prompt-payment laws and request appropriate addendums to your contract before renewing.
Providers are becoming better educated in the reimbursement process and state legislation. That’s why it’s crucial that you work with your third-party payers to help negotiate fair and equitable contracts. The Midland Group specializes in Third-Party Billing for Healthcare. As a third-party billing specialist, The Midland Group will submit, process, and collect all third-party liability claims necessary to collect as much revenue as possible for the hospital and to reduce the patient’s personal financial burden. Our trained medical billing professionals can help you optimize your billing system to increase revenue and improve the patient experience. Book your free assessment today to see how you can maximize all potential revenue surrounding all types of liability claims.