Payments are the lifeblood of the healthcare revenue cycle. For pediatricians to keep the doors open and continue to grow their practice, payments need to keep coming in at the right time and in the correct amounts. In this post, we’ll take a closer look at the management practices pediatricians can control to ensure a healthy payments cycle and the tools that will help get the job done.
Pricing & Insurance Negotiations
Annual changes in RVUs, wRVUs, your location’s GPCI adjustment, and the Medicaid conversion factor also have an impact on how much insurance will pay for physicians’ services, and therefore should play a role in how your practice sets prices. For example, the American Medical Association’s (AMA) 2021 changes to E&M outpatient codes increased the RVU payments by 20% -- this type of increase is not typical, according to PCC’s Director of Pediatric Solutions, Chip Hart, but it’s the kind of change pediatricians should be aware of.
There are typically two parts to how physicians get paid: patient payments and insurance payments. Both depend on pricing to ensure that pediatricians are paid the rates they deserve -- and pricing, along with negotiations with the insurance companies, is up to each practice to tackle.
Regular pricing reviews can help your practice make sure that you’re truly making the most of every charge posting. To begin, managing physicians should be familiar with their insurance contracts and be prepared to renegotiate on a regular basis.
Healthcare policy can affect pricing and payments, too. In 2021, the American Medical Association announced changes to E&M outpatient definitions -- the differences in documentation aim for less “note bloat” and more time with patients, but also have an effect on your payments.
Posting Payments in your EHR
Much of the conversation about physicians’ payments revolves around insurance payments, but patient responsibility payments are important to a practice’s financial well-being, too. While your practice considers pricing and payment models, it’s also a good idea to review the way that patients are making payments at your practice -- and to remove any obstacles where families are struggling.
One excellent way to manage patient payments at your practice is the ability to post payments right into the EHR. This helps keep an electronic record of patients’ balances and payments easily accessible for front desk staff, billing personnel, and for families.
Patient payments are often nuanced, since they are the result of the charges agreed upon by the patient, their insurer, and their physician. The physician may also elect to charge for additional uncovered services, such as ear piercings, offer patients a payment plan, or choose to apply a discount. PCC EHR allows users to post payments, review the ledger, and print a receipt to concisely explain how the payments were applied to open balances on the patient’s account, as well as post insurance payments. Users can also easily apply discounts, write off charges, and more.
Since payments are integrated into the EHR, users can also make notes on a patient’s account for future reference -- say, if there is a payment plan, if the family is switching insurance plans, or if the payments are being split between multiple caregivers.
A smooth payment experience can also make the process easier for families, and ensure prompt payments for practices, too. Workflows such as checking payment information and demographics at the front desk can help remove obstacles from payment processes. Learn more about these workflows in our webinar, Why the Front Desk Has the Most Important Job in Your Practice, with PCC’s front-office expert, Lynne Gratton.
The fee-for-service payment model is familiar to most pediatricians, but there are many other alternatives. A key insight to consider in alternative payment models is that the AMA, the American Academy of Pediatrics, and other healthcare bodies and government policymakers are trending towards models that focus on the quality of care patients receive, rather than the quantity of patients providers treat. Therefore the payment model you choose should not only ensure that pediatricians are paid fairly, but also aim to support quality care for all patients.
A practice might choose an alternative payment model in order to better manage costs, improve specialty care for patients, or to more closely align with payers’ value-based models, such as Blue Cross Blue Shield’s move towards value-based care in North Carolina.
What do physicians think of alternative payment models? As in many business decisions, results are mixed. According to a study by the AMA, physicians who elect to pursue alternative payments sometimes experience a great team-based approach to payments, while others noted a heavy administrative burden to adjust to the new model.
Other options include value-based care, which is payment based on the value of care rendered to patients. This is also known as “pay-for-performance”. Capitation is another option, in which insurers pay physicians based on the average value of the patients they see per month, instead of for each individual patient. Learn more about capitation, its caveats, and its benefits from Chip’s blog.
In independent practice, the payment model that works best for you will depend on factors such as your location and the financial needs of local families. For example, Dr. Tanya Altmann, MD, FAAP, elects and promotes a tiered concierge service for her practice, Calabasas Pediatrics, since many of the parents in her Los Angeles-area practice do not have employer-sponsored health insurance and prefer to pay predictable, annual concierge fees for Dr. Altmann’s services.
The AMA has an extensive document to assist physicians interested in switching payment models, which includes considerations for quality care, cost saving, and reducing waste -- you can find it here. PCC is also here to help; our pediatric consulting team can help you look at your practice’s data, state regulations, payor information, location, and more to examine whether an alternative payment model is right for you.
Getting your practice paid is the most important task physicians are responsible for, because without it, pediatricians can’t continue to offer the quality care patients deserve. While the intricacies and consistent changes in payment processes make getting paid a complex part of healthcare, it doesn’t have to be difficult for physicians to understand or take an active role in. Strike a balance between business sense and compassion for families with a payment model that makes sense for your practice and your community. Get your practice started towards a healthier revenue cycle and learn how to get paid by setting prices with PCC’s Chip Hart in this webinar, which also includes access to an RVU/RBRVS tool to assess the value of your practice.