02.14.2022

12 Tips for Managing Medicare Advantage Contracts

The bargaining table is the new frontier for home health and hospice agencies seeing increasing numbers of patients with Medicare Advantage plans. At stake are ramifications for both today and tomorrow: adequate fees for services provided now and future admission to in-network insurance plans.

SimiTree experts say savvy agencies are sharpening both resumes and negotiating skills to land lucrative MA contracts.

“Agencies need to be pursuing MA contracts right now to ensure they don’t get shut out in the future, when in-network plans are full,” said Brian Harris, SimiTree Director of Financial Consulting.

Being able to clearly articulate skills and strengths to the Medicare Advantage Organizations (MAOs) they’re negotiating with is crucial to ensure agencies get favorable rates for services, Harris said.

“For many agencies, especially smaller agencies without a polished marketing team already touting their strengths and specialty services, or a robust set of analytics to rely on, there’s going to be a learning curve in being able to come to the negotiating table fully prepared to demonstrate value.

“But it’s an essential step right now,” he said. “MA plans are going to continue to grow, accounting for more than half of all patients in the next few years. Agencies have to step up and become effective negotiators."

Step 1: Know Your Worth

An effective presentation is a great starting point, according to Harris. He recommends agencies assess where they shine, and create a brief but informative presentation with pictures and data designed to showcase the specific strengths and the value the organization brings to the MAO. It may be the agency’s specialty programs providing care to patients with chronic conditions such as diabetes or congestive heart failure, or it may be the agency’s overall record of great outcomes and star ratings. MAOs are also highly interested in low hospital readmission rates.

“MAOs are looking for partners to help fulfill and create a stronger continuum for what patients need,” Harris said. “Look at where you’re getting better results on the continuum and approach the MAO about what you have to offer. That’s your bargaining chip.”

Brian Harris

Brian Harris Financial Consulting Director

“MAOs are looking for partners to help fulfill and create a stronger continuum for what patients need."

12 MA Negotiation and Management Tips

The experts at SimiTree have put together a helpful list of 12 other MA contract negotiation and management tips — from what you’ll need at the bargaining table to operational changes you’ll likely need to make to stay on top of document management and collection efforts.

1. Ask for opportunities to include all service lines in contract negotiations.

“Displaying a strong care continuum will support arguments for increased rates,” Harris said.

2. Determine costs and negotiate rates based on desired margins.

Set a budget for services which will be contracted, using statistics and information to help determine your floor, and don’t settle for less.

“Think of it like buying a car,” Harris said. “You wouldn’t buy a lemon. Don’t be afraid to walk away from a bad deal.”

3. Negotiate favorable terms for authorization, timely filing limits, etc.

“These are important terms and conditions, too,” Harris said. “Don’t focus so hard on rates that you overlook these important pieces of the claims filing process.”

4. Two-year contracts are ideal.

“With a one-year contract it can feel like things just got settled and it’s time to renegotiate,” Harris said. “But you don’t want to wait too long down the line and get stuck with something that isn’t viable.”

Avoid evergreen contracts, because you’ll want to renegotiate often. It’s likely the MAO won’t want to get locked into a long contract, either, but if your contract exceeds two years, remember that fee schedules can be set up for review more often than contracts.

5. Follow up by re-evaluating aging agreements.

If you’re already locked into an MAO contract longer than two years, don’t let it grow dust. Look at it as an early test, paying attention to where and how it isn’t working to negotiate a better deal next time.

6. Develop a system to monitor results.

MAOs are going to want to see results. Set up an internal system to be able to easily provide them the data they need. The data will be handy when it's time to renegotiate, and you’ll be able to stay on target for the duration of the contract, identifying and correcting any less-than-ideal results.

7. Look closely at the arbitration clauses in your contract.

Avoid giving the insurance company sole discretion in determining which arbiter will be used. State laws differ, and this can have an impact on arbitration.

8. Create a Payor Matrix to document the nuances of each payor.

Operational challenges are part and parcel of doing business with multiple payors. A matrix can help keep your agency on track by strategizing documentation and collection efforts by payor.

9. Structure authorization and billing assignments by payor to develop staff expertise.

This is particularly important with continuing staffing shortages. Having depth of expertise on your staff is essential for both authorization and billing, but it won’t happen unless you make certain it does.

10. Customize your EMR and clearinghouse to meet different billing requirements.

Your technology should work for you, not the other way around. If you need customization and optimization help, SimiTree IT consultants can make it happen.

11. Keep your agency’s information current with the payor for ease of doing business.

In an era being called The Great Resignation, it’s more important than ever to keep contact information current.

12. Be prepared for delays in claim processing in the beginning.

New payors bring new glitches to claims processing. Expect a rocky start for each new MA plan. Good staff communication and growing staff expertise will ease the process.

SimiTree can help

SimiTree’s financial, operational and IT consultants can help your agency structure intake processes with built-in communication timepoints, set up an effective payor matrix, customize and optimize technology and make other changes for ease of processing MA claims.

Reach out to us today to learn more about how we can help your organization grow stronger and healthier overall. 

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