In the medical field, dropping a medical insurance payer is a contentious issue. There are many sides to the story, and it affects all parties differently.
For doctors, running a medical practice means sometimes making tough decisions to protect the financial health of their business.
The reality is that some insurance companies refuse to pay some doctors the amount those doctors believe they are entitled to be paid. When that happens, the doctor will stop accepting that form of insurance as reimbursement. This is often known as ‘dropping’ a medical insurance payer.
Once the doctor no longer accepts a specific insurance company’s reimbursement, the patients who use that insurance often move to another doctor.
For doctors, considering dropping a medical insurance payer, there are several factors to review before making the choice.
Review your receipts
Ideally, doctors want to have their practice revenue distributed evenly across all insurance payers, but sometimes that isn’t the case. If you look back at the last financial year, you can quickly determine which of the insurers are delivering the bulk of your revenue.
Once you know which are the largest, you can also compare the charges you make with the actual receipts of payment. Any large disparity means that while you may be billing a lot of revenue, you are not collecting it.
Also consider what happens if one insurance payer delivers a large percentage of your income. take note of that too. It is worth considering what could happen to your practice if payments from that payer lower, or if a sudden policy change happens.
Look at the reimbursed services
Some insurance payers give higher reimbursement for certain billing codes. However, very often the same payer may not authorize that payment, meaning the revenue is lost.
If you review the top 25 services you regularly perform, you can look at how often they are authorized for payment. This will give you a better idea of how much they really pay in revenue, rather than what is indicated on their fee schedule.
By using your most common services as your guideline, you’ll be able to see the true impact each insurance payer is having on your financial bottom line.
Calculate insurance payer fee costs
When you have an amiable relationship with an insurance payer, it is easy to overlook fees that are costing your practice money.
But take a hard look at theorem time to time, it is worth taking a look over the real cost of these fees.
You can also take a review of the fine print on your payer contracts. Check the explanation-of-benefits [EOB] forms instead of fee schedules.
Finally, you can review how long it takes to receive payment at all. If you’re wasting time and a larger sum of money, it may be that dropping a medical insurance payer is the best option.
Consider who will be impacted
Dropping a medical insurance payer is often inconvenient for patients. For this reason, it is important to take stock of how many active patients could be affected when you drop a payer.
No matter what the group size, be sure to talk to those patients. Give them a clear instruction of when and how the insurance payer terms will change.
Doing this ahead of time will help both patients and your team who are often explaining the process to unhappy patients.
At the end of the day, a thoughtful strategy for dropping a medical insurance payer will have a positive impact on your practice financials.
