Tag: Payer

Eligibility: Contract Language (Payer v Provider) and Sample to Use

Eligibility: Contract Language (Payer v Provider) and Sample to Use.

Payer contracting negotiations are a critical aspect of managing healthcare costs and ensuring access to care for patients. During contract negotiations, payers and providers work to establish agreements on reimbursement rates, covered services, and other important details. These negotiations can be complex and time-consuming, requiring careful attention to legal and financial considerations. Ultimately, successful negotiations can help to ensure that patients receive high-quality care at a reasonable cost, while providers are fairly compensated for their services. 

What language to negotiate from a provider v a payer’s perspective:

Favorable to physician:


Payor shall be responsible for identifying and verifying eligibility of Members. Payor shall provide each Member with an identification card. It is the Payor’s responsibility to update and maintain eligibility files and systems to ensure that eligibility verification is timely and accurate. Physician may rely on eligibility verifications obtained from a Payor or its designee and Payor shall reimburse Physician in accordance with this Agreement even if a Member is later determined to be ineligible on the date of service.


Favorable to payor:


Physician will verify a Member’s eligibility before providing a Covered Service unless the situation involves the provision of an Emergency Service in which case Physician will confirm eligibility in a manner that is consistent with Law on redeterminations of eligibility. Physician will not be reimbursed for any services furnished to a patient who was not an eligible Member on the date of service

Provider – Contracting: KPIs

KPI / MetricFormula or DefinitionTargetBusiness Purpose
Gross RevenueGross Revenue or “Top Line Revenue” is synonymous with gross charges associated with the provision of servicesThis is Facility Specific. GR is budgeted at the Financial Class Level based upon historical payer mixes, demographic studies, material managed care contracting changes and other forecasting methods.From a revenue cycle management perspective, the objective is rapid, compliant conversion of Gross Revenue into Cash (and legitimate associated contractual adjustments) Therefore, GR is a significant input in a number of relevant KPI’s.
Net RevenueThe term Net Revenue has diverse definitions within the industry but is best defined as: The value of the hospitals dollar, less contractuals, less bad debt.Different methods are used to determine both the value of the Active AR and related %’s that are applied to Gross Revenue to determine its Net Revenue.This is Facility Specific. The NR target is based upon reducing Gross Revenue by anticipated contractual allowances and a Bad Debt Expense target.The contractual allowances and BD%’s are applied by a combination of a calculated model and/or history.A primary objective of the Revenue Cycle Team is to increase Net Revenue through denial prevention and recovery as the reduction of the Bad Debt Expense through improved Self Pay receivable management strategies.
Net Patient Revenue(Before Bad Debt)Net Patient Revenue is Net Revenue prior to making deductions for Bad debt Expense and could be defined as “Maximum Net Collectible Value”Same approach as Net Revenue.Measure Cash as a % of Net Patient Revenue instead of Cash as a % Net Revenue. This approach is not as common as Net Revenue.
Lag Revenue(Rolling 2,4,6 months)Most Gross Revenue is converted into cash and associated contractual adjustments with in 45-60 days. As a result, cash targets are based upon a prior month’s revenue or a rolling average of a prior periods revenue. This is referred to as Lag Revenue. Some targets are based upon a 2 month average with a one month lag.N/ALag Revenue is constantly studied, normalized and modeled to help the hospital become increasingly scientific in setting cash and contractual allowance targets.
Modeled Net Revenue (%)(Expected Reimbursement)Net Revenue Modeling is the practice of converting contract terms(and for Government Payers; DRG and APC Driven reimbursement) into an Expected Reimbursement calculation at the account level. From there, projections can be made based upon “perfection” (not considering denials and underpayments, etc.) from a Reimbursement standpoint. Modeled Net Revenue is usually expressed as a %.This is Facility and contract specific.This works if you Net most of the Receivables at the time of Final Billing. Many facilities utilize historical experience for Net Revenue and related contractuals
Experiential Net Revenue % (ENR) Zero Balance accounts for 12-18 monthsExperiential Net Revenue (ENR) is best described as Collections against the dollar on a large sample of zero balance accounts.The Formula is Receipts/Charges 12-18 months of zero balance charges. Often expressed as a %ENR should be as close the the MNR as possible. The Delta between ENR and MNR is the economic opportunity.ENR% is used to calculate cash target, average daily net revenue and is an input for a host of other critical Key Performance Indicators
Average Daily Gross Revenue6 months gross revenue/ total number of days in the calculation period. Expressed as a $ amount.There may be seasonality to consider so 6 months may be a better standard to determine average daily gross revenue. (Industry standards are 3 months)ADGR is the divisor for a number of other KPI’s. It is conversational language for “how much Business” is being generated on a daily basis.
Average Daily Net Revenue6 Months net revenue / total number of days in the calculation period. Expressed as a $ amount.There may be seasonality to consider so 6 months may be a better standard to determine average daily net revenue. (Industry standards are 3 months)ADNR is the divisor for a number of other KPI’s. It is conversational language for “how much Business” is being generated on a daily basis.
Cash as % of Net RevenueCash/Lag net Revenue (Or Net patient Revenue). Expressed as a %100% or GreaterThis is the most important of all KPI’s and measures cash performance against opportunity for cash performance. This KPI increases in value when calculated at the Financial Class Level and allows for team by team organizational goal alignment.
Bad Debt as % of Gross Revenue(Bad Debt Transfers – Bad Debt Recoveries) / Gross Revenue. Expressed as a % and $ amount.This is NOT the finance view of Bad Debt Expense (which is out of scope for this document but includes looking at actual BD write offs Less recoveries against the budgeted BD allowance against the value of the Self Pay Receivable)From the Revenue Cycle Perspective, this calculation should be managed daily and if at 3.1% or less, will equate to successful migration of Bad Debt Risk. (% is client specific)Used to measure the effectiveness of both Front End Financial Securement and Self Pay follow up.It is critical that only qualifying accounts be referred to BD and that the provider continuously look to reallocate High Risk Self Pay to Federal, State, Private and Local or other funding sources.
Charity Care as a % of Gross RevenueCharity Care Write offs/Gross Revenue. Expressed as a % and $ amounts.Finance, using primarily volumes and experience, prepares a charity budget.From a Revenue cycle Perspective, charity care write-offs are targeted at 1.9% of Gross Revenue. (% is client specific)Charity Care is described as the inability to pay for services rendered (whereas Bad Debt is based upon unwillingness to pay)Non Profits maintain their standing through the provision of Community Benefits visa vie Charity Care.Therefore, it is imperative that qualifying Charity Care accounts not be wrongly classified or through fractured process flow to bad debt.
DNFB – Discharged Not Final BilledDNFB is a term used to define unbilled accounts where the patient has been discharged (for outpatient services the admit and discharge date is one and the same) and the account is either not coded, or pending charges, service documentation or claim holds to be released into the final billed receivable.The Formula for calculating the DNFB target is:ADGR x 4 (4 is an example) … Expressed as $DNFB Targets are financial class and patient type specific.Example: if your suspense days is 4 for Non Government payers then: 4 X ADGR would be your calculation…If you have a 5 day suspense for Government payers then you would calculate this as: 5 X ADGR for Gov. PayersIt is critical to success that the DNFB be managed and sustained with the targeted range as that with is not coded/released cannot be converted to cash.
Unbilled beyond SuspenseWith in the DNFB receivable is a subset of accounts that have moved beyond the targeted date (which is called the Suspense Cutoff date). These receivables represent a direct delay in cash conversion opportunity.The target for this calculation, whether expressed as Days, Net Days or $ is ZEROUnbilled beyond Suspense receives high attention from all functional areas within the revenue cycle, tends to represent the exact co-efficient of any cash short fall being expressed during the month.
DNFB DaysDNFB Receivable Outstanding / Average Daily Gross Revenue (Or Net DNFB Receivable Outstanding / Average Daily net revenue)Fin Class specific, usually 3-5 daysAlso calculated as Net DNFB daysSee above
Gross Days In Revenue OutstandingActive accounts receivable outstanding / Average daily Gross RevenueCalculations can vary: Gross Days Target at the Financial Class level and then aggregates the total for a more specific (and less anecdotal) approach to managing days.This KPI is in the top 5 and is a strong “processing KPI” but may not be tied directly to cash performance. (Avoidable write – offs and high bad debt may produce lower AR days while cash performance is at a variance to target.
Net Days in Revenue OutstandingActive Accounts Receivable / Average Daily Net RevenueCalculations can vary: Net days target at the financial class level and then aggregates the total for more specific approach to managing daysSee above
Days Lower Control LimitA term used to describe absolute perfection for A/R Days at the Financial Class (and the aggregate) level. For Example, a perfect Medicare Inpatient Claim is Inhouse for 3.2 Days, DNFB for 5 days and the submitted and adjudicated in 14-16 days.Financial Class SpecificDays LCL, for both Net and Gross, is an input used for several targets and KPI’s within the Revenue cycle.
Held Claims DaysClaim submission date – Final Billed Date expressed as # of calendar days.No claim should be held longer than 1 business day for correction and submission/re-submission.This is a standard Claims Management KPI that seeks to place rigid controls on predictable, regular billing porduct in CBO.
Clean Claim RateClean Claims/Total Claims expressed as a %95-98%This is a standard Claims Management KPI that seeks to place rigid controls on predictable, regular billing product in CBO
ErosionAs accounts get older, then become less collectible – or “erode” on the Accounts Receivable.
1. A/R > 90Creditors that loan hospitals money against their A/R asset use A/R > 90 as a critical measure of the health of the accounts receivableThrough the use of Days Lower Control Limitis, Financial class specific targets can be set around tolerable volumes of accounts moving past 90 Days.Must maintain acceptable targets from an aging perspective to ensure strong cash performance, and avoid Finance “devaluing” the Active A/R based upon volumes moving into this aging category.
2. A/R > 120Self pay accounts may be deemed worthless (either in A/R or Bad Debt) after valid collection effors for 120 days.Financial Class Specific and is dependent upon whether SP after Insurance is blended with pure Self Pay.120 is an important trigger for Mediare Cost Report compliance and set the standard for Bad Debt Transfers on account that are validated to be uncollectible
POS CashCash collected at, or as a direct result of front end functional area efforts (such as Financial Counseling)Targeting for POS Cash becomes meaningful when measured against an estimated patient portion due.Initiative to implement a Patient Payment Estimator.POS Cash Management is critical because the psychological opportunity to collect declines rapidly after the Patient leaves.There is a direct correlation between POS Cash performance and bad debt reduction.
POS Cash as % of Self Pay Cash CollectedThis Metric measures the overall composition of Self Pay Cash Performance and seeks to understand the contribution of POS Cash Management to the Overall Self pay campaign.See AboveSee above
Percentage of Receivable over 120 DaysPercentage of current total receivables, as defined by amounts owed to the provider/facility by patients, third party payers etc. that is greater than 120 days post dischargeFind this data in your Aged Trial BalanceBenchmarks:
Best practice less than 12%
Average between 12 and 25%
Alarm Greater than 25%
% business in VBC

Updates to UnitedHealthcare Cost-Share Waivers

To ensure members are able to access the care they need as the COVID-19 pandemic continues, UnitedHealthcare is expanding cost share waivers for our Medicare Advantage and Individual and Group Market health plans for certain services. Here’s a high-level

The following provides healthcare providers and patients with information surrounding cost-share (copays, etc.) and applicable policies as enacted by United Healthcare (UHC).

Not ALL patients covered by UHC are implicated — please read the line of business (Medicare, type of commercial insurance, etc.) before making potentially detrimental changes in your cost-share collections.

PRIMARY CARE PROVIDERS WITH UHC PATIENTS, NEW POLICIES APPLY TO YOU

To ensure members are able to access the care they need as the COVID-19 pandemic continues, UnitedHealthcare is expanding cost-share waivers for our Medicare Advantage and Individual and Group Market health plans for certain services. Here’s a high-level summary of the changes.

New! Medicare Advantage Primary Care
Care Oct. 1, 2020 through Dec. 31, 2020, UnitedHealthcare is waiving cost share for Medicare

New! Medicare Advantage Primary Care
From Oct. 1, 2020 through Dec. 31, 2020, UnitedHealthcare is waiving cost share for Medicare Advantage plan members for primary care professional services. This applies to in-network and covered out-of-network COVID-19 and non-COVID-19 visits, whether they are conducted in-office or via telehealth.

Telehealth Originating Site Requirements (no changes since 9/28/20)

Telehealth Originating Site Requirements (no changes since 9/28/20)

The updates to originating site requirements that we announced on Sept. 28, 2020 have not changed.

  • Individual and fully insured Group Market health plans:
    • For Individual and fully insured Group Market health plans, there are changes related to COVID-19 and non-COVID-19 telehealth visits, as well as for in- and out-of-network providers. You’ll also find state-specific rules, regulations and emergency periods on the State Provision Exception page. These may vary from federal regulations. If no state-specific exceptions apply, UnitedHealthcare guidelines will apply.
      • COVID-19 and non-COVID-19 in-network telehealth visits: The expansion of telehealth access is extended through Dec. 31, 2020.* This means health care professionals can temporarily provide telehealth services by a live interactive audio-video or audio-only communications system for members at home or another location. For more details on telehealth billing guidance and provider type eligibility, visit UHCprovider.com/covid19.
      • COVID-19 out-of-network telehealth visits: The expansion of telehealth access for out-of-network providers ends Oct. 22, 2020. As of Oct. 23, 2020, out-of-network telehealth services are covered according to the member’s benefit plan and UnitedHealthcare’s telehealth reimbursement policy.*
      • Non-COVID-19 out-of-network telehealth visits: The expansion of telehealth access for out-of-network providers ended July 24, 2020. As of July 25, 2020, out-of-network telehealth services are covered according to the member’s benefit plan and UnitedHealthcare’s telehealth reimbursement policy.

Medicare Advantage:

  • COVID-19 and non-COVID-19 in-network telehealth visits: The expansion of telehealth access is extended through Dec. 31, 2020. Any originating site requirements that apply under Original Medicare are temporarily waived, so that telehealth services provided through live interactive audio-video can be billed for members at home or another location.
  • COVID-19 and non-COVID-19 out-of-network telehealth visits: The expansion of telehealth access is extended through the national public health emergency period, currently scheduled to end Oct. 22, 2020.*
Medicare Advantage COVID-19 Treatment

Cost share waivers (copay, coinsurance and deductible) for COVID-19 testing and testing-related visits are extended through Dec. 31, 2020 for our Medicare Advantage health plans. This applies to in-network and covered out-of-network COVID-19 treatment.

COVID-19 Treatment

Individual and Group Market health plans:

Cost share waivers (copay, coinsurance and deductible) for in-network COVID-19 treatment are extended through Dec. 31, 2020. Out-of-network cost share waivers will end Oct. 22, 2020. Implementation for self-funded customers may vary.

Medicare Advantage:

Cost share waivers (copay, coinsurance and deductible) for COVID-19 treatment are extended through Dec. 31, 2020. This applies to in-network and covered out-of-network COVID-19 treatment.

COVID-19 and non-COVID-19 out-of-network telehealth visits:
  • Individual and fully insured Group Market health plans: For Individual and fully insured Group Market health plans, there are changes related to COVID-19 and non-COVID-19 telehealth visits, as well as for in- and out-of-network providers. You’ll also find state-specific rules, regulations and emergency periods on the State Provision Exception page. These may vary from federal regulations. If no state-specific exceptions apply, UnitedHealthcare guidelines will apply.
  • COVID-19 and non-COVID-19 in-network telehealth visits: The expansion of telehealth access is extended through Dec. 31, 2020.* This means health care professionals can temporarily provide telehealth services by a live interactive audio-video or audio-only communications system for members at home or another location. For more details on telehealth billing guidance and provider type eligibility, visit UHCprovider.com/covid19.
  • COVID-19 out-of-network telehealth visits: The expansion of telehealth access for out-of-network providers ends Oct. 22, 2020. As of Oct. 23, 2020, out-of-network telehealth services are covered according to the member’s benefit plan and UnitedHealthcare’s telehealth reimbursement policy.*
  • Non-COVID-19 out-of-network telehealth visits: The expansion of telehealth access for out-of-network providers ended July 24, 2020. As of July 25, 2020, out-of-network telehealth services are covered according to the member’s benefit plan and UnitedHealthcare’s telehealth reimbursement policy.

Medicare Advantage:

  • COVID-19 and non-COVID-19 in-network telehealth visits: The expansion of telehealth access is extended through Dec. 31, 2020. Any originating site requirements that apply under Original Medicare are temporarily waived, so that telehealth services provided through live interactive audio-video can be billed for members at home or another location.
  • COVID-19 and non-COVID-19 out-of-network telehealth visits: The expansion of telehealth access is extended through the national public health emergency period, currently scheduled to end Oct. 22, 2020.*