How should CFOs strategize when it comes to payer denials?
The increase in payer denials brought a lot of heat at HFMA this year. From CFOs, to RCM to VPs of payer strategy, everyone had a tip or a strategy for dealing with payers.
The numbers don’t lie, studies show that prior authorization and denials saw a 67% increase in 2022. Another study cited that denials were up again to 11.99% in the first three quarters of 2023.
What can health systems do to work towards a better denial rate and a better relationship with their payers?
Top tips from the executives:
Set the tone: Ensure to set the tone of negotiations and meetings from the start of payer interactions. Make the payer understand why they are a good partner or not. Don’t be afraid to say: “We’re content going out of network if we need to.”
Analyze parity: Look at internal parity and how your organization’s payers compare to other payers. Be sure to understand where your organization currently stands, and where it’s going.
Over-prepare: Prepare your organization up front, even up to the board. Be transparent about challenges in managed care, and look at ways to file litigation if necessary. Customize communications according to the audience and patients.
Key Strategies:
Apply pressure: Don’t accept poor performance for inadequate rates
Drive the narrative: Reinforce the need for partnership, patient care over profits
Over-communicate: Educate leaders, patients, referring physicians
No Delegating: Payers try to siphon off leadership tasks to minimize their input. Don't let that happen.
Stay the course: Be patient
Review deliverables: Hold them accountable. No two negotiations are the same.
Consider creating a national payer scorecard: Keep track of the reputations, strategies and tactics of every payer your organization does business with.
Marie DeFreitas is the finance editor for HealthLeaders.