The world of healthcare is notorious for its unique set of challenges. From government regulations to HIPAA compliance, the scope of a medical professional’s responsibilities extends beyond the typical scope of duties expected from other industries. As such, there are many nuances within the field that require careful attention and strategic planning to avoid pitfalls or legal repercussions.
With so many complex considerations involved in working with healthcare payors, how can you succeed with your payor contracting strategy? The key lies in an honest and thorough understanding of why HPA payor contracting is essential to your company’s success. Let’s explore why this truth is so important and how it can affect your medical billing operation moving forward.
What is Payor Contracting?
When a healthcare payor, like an insurance company, signs a contract with a healthcare provider, they are promising to cover a certain percentage of the provider’s services. These agreements also come with certain terms, conditions, and requirements, which are listed in the contract. Once both parties have signed, these contracts are legally binding. This means that both parties have agreed to specific terms of the contract, which will be followed by both parties. If the payor fails to live up to their contractual obligations, then the provider can take them to court for breach of contract. If the provider fails to meet their side of the deal, the payor can terminate the contract, and the provider will no longer be able to receive payment from the insurer.
Why Is Payor Contracting So Important?
Healthcare payor contracting is essential because it gives you power over your financial success as a medical provider. When you get a payor to sign a contractual agreement to cover a percentage of your services, you are ensuring that your patients will have the funds necessary to pay. This creates a sense of security and stability within your practice and allows you to remain focused on the most important tasks.
Healthcare payor contracting comes with a wide range of benefits and can significantly impact your ability to be successful in the industry. The following are a few of the most important reasons why HPA payor contracting is so crucial to your company’s future:
- You’ll get paid earlier and more often when you have a contractual agreement.
- You’ll be able to budget and plan more effectively by avoiding “the gap”.
- You’ll be able to better manage cash flow and avoid insolvency.
- You’ll be able to plan for future expansion and growth.
Medical Billing Mistakes That Ruin Your Chances of Success
Unfortunately, many medical billing and coding companies don’t understand the importance of payor contracting. They mistakenly believe that getting as many payors to accept an estimate is the most important goal. Unfortunately, this approach can seriously damage your reputation and stifle your cash flow. If you’re contracting with payors and not getting paid, then you’re not actually contracting with payors at all. You’re contracting with deadbeat payors who don’t have the ability to pay or are choosing not to pay. Deadbeat payors are the enemy of any healthcare provider. Deadbeat payors are the biggest challenge any medical billing company faces. They can be avoided, but only if you understand and know how to avoid the following common mistakes:
- Failing to understand how payor contracting works.
- Failing to focus on payor grading and payor acceptance rate.
- Failing to understand the importance of timely payment.
- Ignoring or failing to comply with the terms of payor contracts.
Key Takeaways
In summary, payor contracting is a vital part of running a successful medical billing operation. If you want to be successful in this field, you have to understand the importance of contracting with payors and the specific steps you need to take to make that happen. If you don’t have payor contracts, you’re not a medical billing company. You’re a medical billing company without a way to get paid. If you’re serious about success in this field, then you need to understand the importance of contracting with payors and the specific steps you need to take to make that happen.