For healthcare providers, even the most advanced revenue cycle management (RCM) is not enough in the face of significant challenges associated with bad payer behavior. Physician groups, hospitals, and EMS companies struggle with denied claims, underpayments, and difficult contract negotiations. These critical issues disrupt cash flow and weaken financial stability.
A cohesive strategy that merges legal tactics with traditional revenue cycle management provides a comprehensive solution for overcoming these obstacles. By integrating legal models into RCM efforts, providers can unlock new opportunities for maximizing revenue, reducing administrative burdens, and ensuring fair compensation.
Litigation Can Help Overcome Common RCM Challenges
Addressing complicated RCM challenges demands solutions that go beyond traditional healthcare revenue management approaches. These include insurance denials and underpayments, which remain significant roadblocks for providers seeking fair compensation. Allia Group’s healthcare finance podcast, The Strain, recently featured Jennifer Brown, General Counsel at Progressive Emergency Physicians to discuss relevant issues. In her episode, Brown discussed the strategies she employed to ensure providers get paid fairly, including the critical role of legal expertise in navigating complex payer disputes and recovering underpaid revenue.
Brown explained,
“We are aggressively pursuing the dispute resolution process to procure fair payment. We’ve seen the same argument used over and over again. They’re trying to mitigate healthcare costs and the providers are charging too much, et cetera…So we actively pursued the federal IDR process for that limited out-of-network exposure for the rest of the group.”
Additional legal tools for RCM companies like the No Surprises Act’s federal Independent Dispute Resolution (IDR) process or other forms of litigation can provide additional paths forward and complement RCM solutions. A comprehensive legal strategy can help providers fight for timely, accurate payments, ensuring claims aren’t stuck in limbo due to unsavory payer tactics.
Litigation’s Role in Payor Contract Negotiations
A strategy which utilizes litigation, IDR, and other legal means to adjudicate payor disputes offers a more holistic approach to revenue cycle management, and consistent use of IDR and litigation sets the table for improved posture in payor contract negotiations. This requires collaboration between thought-leading RCMs and innovators in litigation.
Sophisticated providers have been successful bringing payers back into network contracts through the use of litigation and IDR. The resulting reimbursement values from legal disputes have been applied in complex payer contract negotiations. Jennifer highlighted the benefits of her effective IDR-driven approach to renegotiating payer contracts. Her success story demonstrates the impact of IDR and litigation. Legal approaches can use data from past contracts and payment trends to help providers secure fair reimbursement rates.
“When I used the IDR process, over the past couple of years, we actually signed additional contracts. So as much as the No Surprises Act has created challenges… We have been able to sign network contracts at rates that we believe are fair and reasonable. For me, a lot of that I attribute to our success in the federal IDR process.”
Brown’s experience sheds light on how the right legal model and data analysis can help extend the revenue cycle and reduce the workload for RCM teams. By utilizing legal dispute resolution managed services, providers can continue focusing on patient care without the distraction of litigation and IDR. These new approaches result in both increased revenue and overall reduced timelines.
When Should RCMs Use Litigation for Capital Recovery?
For healthcare providers, knowing when to escalate a payment dispute to legal action is crucial. Legal action becomes necessary when:
- Claims are repeatedly denied or underpaid
- Services are continuously downcoded
- Payers violate the terms of their contracts
It is important to consider legal strategies as soon as any of these issues become apparent. This grants providers the opportunity to maximize their chances of recovering fair compensation and prevents long-term cash flow disruptions.
Maximizing Financial Outcomes Through Combined Strategies
A strategic combination of legal expertise and RCM solutions is key to maximizing financial outcomes for healthcare providers. Legal strategies can help:
- Improve providers’ revenue
- Help recover the value of services quickly and efficiently
- Allow for leverage in future payor contract negotiations.
- Extend the revenue cycle
Providers who integrate legal models with their RCM teams can adopt a holistic approach to revenue recovery, overcoming payer challenges while securing the financial stability of their organization.
By leveraging legal pathways like Allia Group’s novel litigation and IDR strategies alongside traditional revenue cycle efforts, providers can reclaim revenue that would otherwise be lost, ensuring that their services are compensated fully and fairly. Contact us now for a consultation to maximize capital recovery for your physician group, hospital, health system, or EMS company.
Key Takeaways: Revenue Optimization and Efficiency Through Legal Models
- Overcome RCM Limitations: Advanced revenue cycle management (RCM) alone can be insufficient against denied claims, underpayments, downcoding, and bad payer behavior. Combining RCM with legal strategies unlocks new opportunities for revenue recovery.
- Strengthen Payor Contract Negotiations: Litigation and Independent Dispute Resolution (IDR) strategies can enhance providers’ ability to renegotiate contracts at fair and reasonable reimbursement rates.
- Extend the Revenue Cycle: Legal tools like IDR and litigation can complement traditional RCM efforts, recovering revenue from both recent and older claims while reducing administrative burdens.
- Data-Driven Legal Strategies: Providers can leverage historical data from past contracts and prior out-of-network payments to secure better reimbursement rates and resolve disputes more efficiently.
- When to Use Legal Action: Legal escalation is crucial for addressing persistent claim denials, complex disputes, downcodes, or underpayments when traditional methods are not working.
- Maximize Financial Stability: A combined approach using litigation, IDR, and RCM enhances cash flow, ensures fair compensation, and provides leverage for future negotiations.
Allia Group provides healthcare providers the opportunity to reclaim revenue, improve cash flow, and focus on patient care. Contact us for a consultation to explore tailored solutions for your healthcare organization.