June 16, 2020

Payer Disputes: “I Won’t Back Down”

Hank Smither

Many of you might be too young to be familiar with Tom Petty’s hit, “I Won’t Back Down”, but it’s a great song to keep in mind when your addressing payment disputes with your commercial payers.

When payment issues arise, the burden is on the provider to get paid and paid accurately.  As Revenue Cycle professionals, we are the guardians of our organization’s cash and it falls on us to ensure claims are paid timely and correctly in accordance with our contractual terms or relevant regulations.

The best protection to ensure you are paid properly is a strong revenue cycle department – timely and accurate billing, a strong denial management program, solid revenue integrity practices and good communication with your major Payers.  But even if your organization has a top-notch shop, or has some room for improvement, disputes will occur and regardless of your organization’s situation if you don’t back down, you can be successful in collecting what should be paid.

It is important to be prepared for a process that can take up to two years and will require time, resources, and money, as well as coordination with your Managed Care department and both internal and external legal teams.

The good news is most Payer disputes can be resolved through your normal appeal process or by working directly with your Payer representative.  But we want to strongly encourage you when typical approaches don’t resolve disputes to your satisfaction, “Don’t back Down”!

Once you’ve made the decision to keeping pushing forward, it’s time to get prepared and organized:

  • Issue Identification– What is the main issue in dispute- a contract term, inappropriate denials, Payer policy updates you didn’t agree too, usual and customary payment rates, or all of the above?
  • Contract Dispute Terms– if the dispute is with a contracted Payer, be familiar with the terms in your agreement that govern disputes, especially any administrative requirements such as the number of appeals that must be filed, meet and confer language, and if arbitration is the final course of action.
  • Non-Contracted Payer– if the dispute if with a Payer your organization is not contracted with, you’ll need to be familiar with your state’s statutory limitations and other regulations that will govern how the dispute is handled.
  • Claim Lists– don’t underestimate the effort required to pull together a complete list of disputed claims and all the required documents and data. Typically, you’ll need to pull open and closed claims that have been written-off, decide what timeframes to include (it’s good to establish a cut-off date that provides enough time for the normal processing of claims to occur), and contact any recovery vendors you use to ensure you haven’t missed anything.  You’ll also need to be begin gathering documents- UB’s, RA’s, Appeal Letters, Account notes, etc.
  • Organizational Approval– if senior management, legal and your managed care department hasn’t been involved up to this point, now is a good time to get everyone up to speed and ensure you have the organization’s support. You don’t want to find out later that managed care just started a negotiation on a new contract, or your CEO is good friends with the health plan’s CEO.
  • Costs– if your agreement has an arbitration clause, which most agreements do, be prepared to spend $300,000 to $500,000 just in legal fees. It might be much less if the dispute is resolved quickly, but since we won’t be “backing down”, you’ll want everyone to be prepared.
  • Communication – once the organization is behind your decision to move forward, communicate with the Payer firmly, but professionally. Offer them the opportunity to sit down and negotiate the dispute internally (note this may occur as part of a “Meet and Confer” provision in your agreement) and request they sign a tolling agreement to hold any statute of limitation timelines.  This can be very helpful if the timelines are short and claims may become time barred.

Large organizations with disputed claim values of $3M to $10M, the decision to move forward is easy. Smaller providers may choose to use legal firms that work on a contingency fee to minimize the financial risk. Whichever direction you choose, we just want to encourage you to do it.

This can be a long, drawn out process especially if you’re dealing with a Payer that fights you the whole way.  But staying strong and not backing down does come with many short-term and long-term benefits-

  • Quick Cash – most Payers will quickly adjudicate any questionable claims to remove them from the list to avoid looking bad in front of the Arbitrator.
  • Current Disputes – if you do nothing, these payment issues with will continue along with the revenue leakage they cause.
  • Future Disputes – not backing down informs the Payer you mean business and might be more reasonable addressing the next dispute.

I know it can all seem a bit overwhelming, but The Wilshire Group has been supporting our clients’ payer disputes for the past decade helping to recover well over $100 Million in disputed payments.  We know it can be done, so don’t back down! Review more about our payer dispute services or contact us at h.smither@thewilshiregroup.net for more information.

Hank Smither

Managing Partner

Work with me