4 Challenges Payer Influence Creates for Medical Practice Management

Third-party payers have been increasingly wedging in between the patient and doctor relationship for the past 10-15 years. Overhead costs and fewer reimbursements from payers are making it more and more difficult for providers to cover expenses. Payer influence can lead to a lack of proper revenue cycle management, among other issues.

As payers gather more influence over a medical practice, several burdening challenges arise including audits, prior authorizations, narrowing provider networks, and tiered co-pays.

1) Audits

The federal government is increasingly requesting audits for Medicare charts. State governments are able to request audits for Medicaid patients for 10 years after a patient’s treatment. If a practice has not been meticulously recording patient and payer information, an audit will cause a considerable time disruption.

2) Prior authorizations

Increasingly, payers require physicians to authorize prescriptions and procedures by explaining their use for each patient. According to a study from the Kaiser Family Foundation, 21% of brand name drugs covered by Medicare Part D required prior authorization in 2013, a statistic that is only increasing in 2015.

The defense of third-party payers is that prior authorization lowers costs and improves patient safety. However, this is a time-consuming and unnecessary requirement when physicians have the proper knowledge and authority to prescribe medicine to patients. Spending this excess time on prior authorizations potentially limits the one-on-one time that a physician can spend treating a patient.

3) Narrowing Provider networks

Provider networks are narrowing, causing a reevaluation of providers. If your practice is unfortunately dropped by a payer, you must notify patients immediately. Some patients may want to continue to use your practice. In this situation, it is a good idea to form a standard policy for self-pay.

4) Tiered co-pays

Payers are purposely implementing higher patient co-pays for brands that are not preferred. Payer-preferred brands of prescription medicine are also encouraged, as practices and/or pharmacies that tend to prescribe the preferred, lower-cost brands are paid more.

Solutions to Medical Practice Management Challenges

What are ways to strengthen the doctor-patient relationship, despite increasing payer interference?

-Build up a base of online files recording everything, especially in the case of a government audit. Maintain accurate record of patient and payer.

-Patient forms should be filled out and updated with each patient visit.

-If possible, it is recommended to designate an employee for prior authorization work.

Applied Medical Systems offers professional healthcare consultants to help your practice as payer influence increases and the relationship between payers, patients, and physicians continues to change in 2015. For more information on our medical practice management solutions and services, contact us at our Durham, NC office.