No business relationship is—or ever will be—perfect. Then again, very few people ever stand up and make a toast to their insurance company. In fact, both providers and patients tend to complain about rising healthcare costs, long wait times when trying to reach payer reps, and unclear answers once they actually get through to a real person. This is nothing new. And while some providers may think their payers like to play games, WebPT Billing Success Manager LaShawn Sherman—who used to work for a large payer in California—believes those difficulties aren’t necessarily intentional.
I recently interviewed Sherman to gain insight on her experience as a former insurance company employee and to get her advice on developing good payer-provider relationships, understanding medical claim denial reasons, limiting those denials, and speeding up the appeals process. Here’s what she had to say:
1. What would you say are the biggest misconceptions that providers have about payers?
I worked for a large insurance carrier in California for eight years, and many providers incorrectly believe that insurance companies devise stall tactics to limit reimbursement or slow down the payment process. That simply isn’t true. Because insurance companies have specific protocols to follow, providers typically wait a minimum of two billing cycles to receive payment.
Additionally, providers might be convinced that their payers arbitrarily assign a blanket reimbursement rate, without looking over any provider-submitted outcomes data that demonstrates these providers’ value. But they would be wrong. Payers tend to weigh data as they determine reimbursement rates for their individual providers and try to be “competitive” with rival insurance carriers by issuing payments that are similar to their competitors’.
2. Typically, how long does it take for payers to finalize contracts with providers to go in-network? Is the process the same for all providers?
I oversaw contracts for some time in my previous position, and it would usually take us a minimum of 60 days—and a maximum of 120 days—to finalize those documents. Unfortunately, this process can take a bit longer if a provider doesn’t fill out paperwork on time or doesn’t closely follow the steps required to finalize the contract.
While different payers have different rules, insurance companies are, by and large, looking to ensure the provider has filled out the paperwork correctly, is credentialed, and has an NPS number. And this is a pretty standard process across the board.
3. What should providers keep in mind when they’re weighing the benefits of providing in-network versus out-of-network care?
The in-network benefits are obvious: patients can choose your clinic or numerous other providers when seeking PT—and they will undoubtedly pay lower deductibles, copayments, and coinsurances with an in-network provider than they would with an out-of-network provider. As an in-network provider, you’ll more than likely receive new patient referrals through your insurance carrier. Additionally, you’ll continue to get reimbursed at the same negotiated rate for any treatment or services you provide, as outlined in your payer contracts.
Meanwhile, being an out-of-network provider means that you’ll likely get paid at a higher comparable in-network rate. Plus, your practice will probably spend less time—and have fewer headaches—submitting claims to payers and disputing payment with your patients. And lastly, your patients may value having more direct contact with your office staff rather than waiting for an insurer to intervene.
Still, you’ll need to be mindful of a few other things: Patients using out-of-network providers often pay higher deductibles, copays, and coinsurances, making it difficult for providers to collect these fees in a timely manner. But, joining an in-network system doesn’t always make sense financially, especially if you weigh the per-day cost of treating patients and against the per-day reimbursement you receive from a specific payer. And while you want to be as open and transparent with your patients as possible, current patients may up and leave if you no longer sit on their insurance panel. Plus, there’s always the real possibility that you’ll simply confuse current patients with your decision to go out-of-network.
4. How do payers determine whether to pay or deny a claim?
Some providers may think payers play games and take their sweet time determining whether to pay or deny a claim, which, of course, isn’t true. When a claim comes in to a payer, the payer first determines whether the provider is in-network or out-of-network. Beyond that, though, it’s a pretty straightforward process to determine whether a provider has submitted documentation that is sufficient enough for that provider to receive payment. Sure, there are times when claims tend to throw up some red flags. For instance, payers tend to deny claims when providers fail to include the right patient ID number. Additionally, payers may investigate providers for potential fraud if the provider’s claims indicate that a patient is receiving PT for a “lengthy time” (i.e., longer than six months). In that case, the provider would need to document why that patient requires further PT before the insurance company would decide whether to pay for those services.
5. What are the most common claim issues that cause denials?
Some of the more common issues I came across while working in the insurance field included the repeated submission of illegible claims information and expired health plan cards as well as providers’ failure to coordinate patient benefits and complete timely filing of claims. While payers have different rules around timely filing, many insurance companies require providers to submit claims within 45 days of the original date of service. That can be an issue for providers who tend not to complete their SOAP notes on time. Payers also may deny claims due to incorrect CPT code or modifier use—especially if there’s a lack of details in the documentation.
6. What can therapists do to speed up the appeals process? When should therapists try to appeal claims?
Just pick up the phone. When you get a denied claim, it’s important to call your payer in a timely manner to (1) determine the issue and (2) find out how to resolve it. In other words, be proactive and don’t let the issue fester. Furthermore, don’t assume you know the specific issue with your claim denial, as you may not be addressing the real issue at hand. Your best bet is to always speak with a live insurance rep via phone; that way, you’ve opened a direct line of communication between you and the payer. Sometimes, a quick conversation about a small documentation discrepancy (e.g., including the wrong CPT code or patient ID number) can be cleared up over the phone, without the need to appeal.
Still, if you still think the denial is incorrect—and that your documentation is up to par—you typically must appeal the payer’s decision within 30 days. If your claim is denied a second time, you’ll have another 30 days to appeal. You also have the option to appeal at the state level should you come up on the losing side of your payer’s appeals process. Now, when you’re appealing a claim, I would strongly encourage your office staff to attach all documentation (e.g., daily notes and progress reports) to the denied claim, as that will speed up the process. I also recommend including a letter from the PT indicating why the patient required treatment as well as a cover sheet detailing everything included in the appeal.
7. What advice would you give to providers who continue to have their claims rejected or denied? What steps can they take to limit denials?
First, I would suggest that providers make a copy of their patients’ insurance ID cards. This way, you’ll always have access to your patients’ information when discussing any unresolved claims with your payers. You may also want to visit your payers’ websites to determine what’s required of you when submitting claims.
If you still continue to receive denied claims, I would also make it a point call your payers directly to determine patient plan eligibility. For example, just because a patient’s ID card states that he or she is eligible, the patient may not be up-to-date in paying his or her premium and thus, may not be considered in good standing. And, for PTs themselves, this should go without saying: always make sure you’re accurately documenting your patients’ care before submitting any claims to your payers.
8. What considerations should providers keep in mind from their payers’ standpoint during contract negotiations?
When insurance carriers are negotiating new contracts, providers are the last thing on their minds. In fact, payers are looking to do anything they can to benefit their members (i.e., negotiate the best possible rates). Ultimately, this helps save insurance companies lots of money over the long term.
But, there’s one thing your payers probably haven’t shared with you: your practice has the option to negotiate a new payer contract once annually—and payers will nine times out of ten negotiate a new rate. And when that happens, there’s a chance you can negotiate a raise.
9. What do insurance companies not want providers to know?
Insurance companies that deny claims never go out of their way to explain to providers why specific procedures aren’t covered under the patient’s policy—even if it seems like that should be the case. In these circumstances, instruct your patients to look over the terms in their policy, because some plans don’t cover certain categories of care.
Insurance reps may also keep quiet about tacking hidden charges onto patients’ bills. These charges—which may be one-time or recurring—are often due to patients receiving out-of-network care that isn’t covered under their plan. Sometimes, patients may decide to ignore paying those charges altogether. As a provider, you hope your irritated patients eventually pay their bills in full.
10. Why do you think providers place such a negative stereotype on insurance companies?
Poor customer service and long phone wait times. When providers call to inquire about a patient’s coverage, they’re bound to wait ten minutes or longer to speak with a representative who might not be the most resourceful. Worse yet, I sometimes spoke to providers who had received two different explanations from two different insurance reps while trying to confirm via phone if the information they received was accurate—and that creates plenty of confusion and irritation.
To add insult to injury, providers are often instructed to visit the insurance carrier’s website to track down answers to their questions, which is quite impersonal. Of course, if you’re spinning in circles or unsure whether you’ve found the right information, your options will be limited, as websites don’t have the ability to have a two-way conversation.
11. In your opinion, are insurance companies truly “the enemy” of providers? Where can payers and providers find common ground?
I don’t think insurance companies ever try to be the enemy. Dealing with long wait times—and not getting the answers you need for a particular claim—can be a pain in the rear end. But, much like providers have established processes and procedures to treat patients, payers have done so with regard to reimbursement. In other words, everything insurance companies do is for a reason. Furthermore, payers have an obligation to protect patient privacy and prevent fraud, so they must be knowledgeable—and create strict policies—about HIPAA compliance and stay aware of potential red flags that could lead to fraud or abuse.
That’s why it’s important to find some type of common ground. As a provider, if you’re billing 60% or more of your claims to one carrier, then it would benefit you to form solid working relationships with your payer representatives. Understanding your payers’ needs can clear up any gray areas and take away some of the stress when you’re submitting new claims.
12. What steps can providers take to ensure a long-term, beneficial relationship with their payers?
As I’ve touched on already, providers should look to build a long-term relationship that also benefits the payer. That means making a habit out of calling your payer directly when questions arise; that way, both parties can be on the same page. I also tell providers to utilize all the resources and tools that their payers provide them (e.g., those available via email, phone, or the Internet) as well as scour their payers’ websites to understand what their documentation should include. Everything tends to run smoother—and relationships tend to improve—through open communication.
So, what do you think? Did WebPT’s very own LaShawn Sherman sway your opinion one way or the other about how your insurance carriers—and payers in general—operate? Or, perhaps you have more questions. Let us know what’s still on your mind in the comment section below, and we’ll do our best to get you an answer.