There’s a key question more providers need to know the answer to: What is a contract exclusion?
A contract exclusion details the medications and treatments that are not included in the levels of a managed care contract. Are exclusions a good thing or bad thing?
That depends on us, the provider. If we identify and capture these exclusions and bill the health plan for them, then exclusions are great. If we are unaware of the exclusions or are unable to identify them, then they’re not so great.
On average, managed care companies are the payor source for half of Americans with Medicare (via Medicare Advantage, or MA, plans), and the way our post-acute care facilities get paid is now more complex. When most of a typical census was covered by traditional Medicare, fee for service norms made reimbursement relatively predictable and reliable.
Most managed care patients are now covered by a health plan-specific contract with multiple reimbursement stipulations, such as contract exclusions, that require careful attention. Capturing every contract exclusion is an important step for getting full reimbursement.
Contract exclusions and the pressure of leveled contracts
In recent years, most health plans have shifted to using Medicare Advantage contracts that define levels of care (usually four) that specify a per diem reimbursement rate for each level. The exclusions list details the medications and treatments that are not part of the contract levels. These leveled contracts, with exclusion lists, put pressure on providers to adapt their workflow to accommodate managed care reimbursement rules.
No two contracts look the same, which adds insult to injury with an already overwhelming and complex new challenge for providers. Here are four steps to optimize your chances for full reimbursement.
Step 1: Start with the contract terms
When the contract is being created, negotiate with the plan to make the exclusions list larger so your go-to meds and treatments can potentially be covered. Contracts can specify rules for what is covered or excluded and how to request coverage for excluded items.
Know what the plan’s rules are for levels and for items on the exclusions list, and make sure your team knows them verbatim. These early steps set the stage for operationalizing your managed care contracts.
Step 2: Capture and communicate
This is where the action is. We like to use the term “operationalize” because working successfully with managed care payors is exactly that: a precision operation.
Ideally, every member of a care team has access to the health plan contracts so when a patient’s condition requires a change in their care level or requires something on the exclusions list, staff alert each other, and the correct action occurs in real time. Staff note a change, communicate with each other, and then request authorization from the plan. Capturing exclusions requires this degree of teamwork, daily.
Step 3: Have appropriate infrastructure to scale
All the above sounds pretty simple when only a couple patients are covered by managed care contracts. For many, if not most of us, those days are fading into history. We now have substantial numbers in our managed care census and it’s a struggle to operationalize many different contracts every day.
A best practice for scaling up is to have a dedicated case manager and appropriate technology that empowers the care teams with the right tools to never miss a beat. A case manager and tailored technology helps a team capture the exclusions, get authorizations for timely care, and set up the facility for proper reimbursement.
Step 4: The unsung heroes complete the picture
The care teams do the heavy lifting. This is truer than ever with daily life in the hallways. But the final step in the operationalizing of managed care contracts is in the front office. All the work up to this point has to be converted into a claim for submission to the plan. Again, it sounds simpler than it really is.
It’s so easy to compile a UB-04 that looks complete, yet it misses level changes or includes medications on the exclusion list but will be denied because the authorization was not received. An all-star business office manager might be able to backtrack and clarify with staff, but what about when dozens of claims are needing to be processed and submitted?
Step 4 is the non-clinical but no-less crucial final piece of full reimbursement. Whether this happens from consistently excellent analog best practices, or if it’s the final step of a case manager-led, software-supported operationalization, the result needs to be the same. This is the new reality for winning with managed care payors.
Susie Mix, BS, MBA, NHA, is the founder and CEO of Mix Solutions Inc. She has more than 20 years of experience in the post-acute care industry. She has firsthand experience running facilities and holds the long-term care mission close to heart. Her experience working in the field, coupled with her time spent at a health plan provides a unique blend of knowledge that helps her provide solutions for each client. Mix has been doing managed-care consulting with facilities since 2009. She can be reached at [email protected].
The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.
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