Payer policy changes that are not reflected in contracts are the leading source of revenue leakage for providers, according to a July 29 report from Trek Health in partnership with the Healthcare Financial Management Association.
The report is based on a survey of 161 healthcare leaders at hospitals, health systems and other provider organizations. It examined how providers use Transparency in Coverage data in commercial payer negotiations and reimbursement strategy.
Six findings:
1. Sixty-eight percent of respondents identified payer policy changes not reflected in contracts as a revenue leakage risk. Inconsistent payment practices across payers followed at 64%, while 42% cited changes to payment methodologies or logic.
2. These findings point to contract management and compliance problems rather than contracted-rate problems, according to the report. Below-market rates were cited by 30% of respondents and limited visibility into competitors’ rates by 25%.
3. Only 26% of organizations proactively track and model policy changes across major payers before the changes affect reimbursement. Thirty-two percent model the effects for selected payers or service lines, 19% identify risks reactively but struggle to quantify the financial exposure and 14% typically identify the impact after revenue has already been affected.
4. More than 60% of respondents said forecasting reimbursement shifts driven by payer rate, policy or methodology changes is often or always challenging.
5. Providers also face obstacles in converting available price data into negotiating leverage. Forty-four percent cited limited time or analytical resources as a barrier, while 39% said the data is difficult to normalize or trust. Only 8% reported no significant limitations.
6. Providers can reduce leakage by connecting reimbursement data with payer contracts, financial performance and continuous policy monitoring. Providers with integrated processes are better positioned to quantify risks before they reach the claims process, according to the report.
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