I’m excited to introduce the Payer Playbook series, where I will be breaking down some of the most convoluted payer tactics that we see in our data every day at Anomaly.
We all know that providers are being hammered with denials. They are still a massive part of the picture, and payers keep getting more creative with administering them… more reason codes, more records requests, more ways to inundate healthcare admin staff with enough claims that some will inevitably fall through the cracks. But denials are only one of a much bigger playbook that payers have at their disposal. There are downgrades, takebacks, bundling edits, medical and reimbursement policy coverage changes, never ending information requests and the list goes on. Some days I actually wonder how the hell any health systems ever get paid.
When you spend enough time in the data (and we spend a LOT of time in the data), you start to notice it isn't random. Every payer deploys these tactics in different ways - and when you stare at them long enough, you start to see the payer specific strategy, which tactics they deploy (or don’t) and to what degree.
Each edition, I'll walk through a payer tactic - a play - that is being used to not pay, pay less or delay payment and share how they’re doing it with concrete examples.
Not only is it easy to spot a denial, but they are now nationally, publicly tracked. You can ask your AI agent of choice which payers have the highest denial rates and have an answer at your fingertips. But what is much harder to see is when payers put new policies in place to enact bundling edits. This is when a payer says a service or multiple services you billed belong under the umbrella of one code that doesn't get paid separately. Here is a real world example
One national payer released a policy that states that materials that resorb into the body are no longer considered implants. What this means is that expensive and vital implants such as bone grafts are not reimbursed as implants and rather get bundled into "surgical supplies.” For a common spinal fusion biologic like rhBMP-2, the material alone can add $900 to $5,500 per case, and more depending on the procedure and dosage, but because it “reabsorbs into the body,” it is not reimbursed…and poof, overnight the same procedure you used to get paid $10,000 for is now $8,000. The cost for the materials hasn’t changed, but the payment that helped cover that cost has.
How payers communicate the bundling of payments differs…they may use a contractual adjustment, they may use a bundling reason code, they may call it “non-covered”. Depending on how the payer communicates it and how your workflows are set up, these may never hit an underpayments workflow. And even if they do, they are usually being disputed one by one with the payers and often do not get resolved due to the payers stance on policies superseding contracts.
“Hey, I explicitly carved out high dollar implants, devices and supplies in my contract for this exact reason!”. Unfortunately, most payers have carefully crafted contract terms that give them a blank check to roll out new policies that silently erode your revenue. The language typically gives them broad rights to have their “policies” supersede whatever carve outs and payments you thought covered you. Most contracts do have some provision to limit financial impact from these policy changes, but they often put the entire burden on the provider to find the policy, quantify the impact and dispute these changes in really tight windows, and in many cases the impact must be significant to even have the right to dispute the policy (think 1%-2% of net revenue).
Trying to keep up with all of these changes, determine how they do or don’t impact your organization, and whether you can even do something about it is a complete nightmare. Tight coordination between revenue cycle and managed care to deeply understand your contracts, policies and claims data is the only way to try and defend yourself. With thousands of payer policy changes a year buried on payer websites, provider portals and bulletins, plus hundreds or thousands of pages of dense contract language has made this a truly impossible ask of any team…until now. Modern technology and AI are making this a solvable problem, and one that we are actively tackling at Anomaly.
Building the data layer, accountability structure and processes for ongoing monitoring and resolution of this tactic is hard, but it’s critically important. Focusing on monitoring payers with more provider-favorable contract terms and aggressively defending against these tactics is something every health system should be focusing on, because this is not going away any time soon. This requires managed care working with revenue cycle and analytics to crowdsource newsworthy policies, bulletins, etc and quickly triage for financial impact and dispute process implications
Work with revenue cycle, managed care and legal expertise to develop a stance on more reasonable contract terms to try and implement with each of your payers to ensure this is a key focal point anytime you are renewing contracts or signing on with new payers.
Whether you are actively operating under this model or just starting to realize you need to do something different, every organization needs to be trying to become world class at this skill. What we have seen from payers is that some are much more sophisticated than others and aggressively creating and strictly enforcing new policies all the time while others haven’t done much to date, but eventually they will all follow suit if there is cost containment involved…what that means is that most health systems have enormous financial liabilities lurking in these new and/or unenforced policies.
I could discuss this topic for hours (and regularly do), but that’s enough for now. Reach out if you have other insights or want to share learnings. In the next edition of the Payer Playbook we will discuss the “Death by a thousand information requests” tactic…which is almost as fun as this one.
