What is payor management and how does it work
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Healthcare is a wide system that consists of a range of different practices. Although many include major networks, there are also independent practices that may not have the same resources as bigger networks. The government does not have funding for every single health practice and to meet the demands of individuals’ wants and needs, which makes it essential for payers to step in and support the healthcare sector. Within this sector, the term ‘payor’ is used to designate a person or body, other than the patient, to finance the cost of medical services and products.
In situations like this, the payor gains revenue via premium payments or tax dollars, ensures provider claims for service go ahead, and pays provider claims by utilizing premium or tax revenues collected. If you have a practice within healthcare, you should have an effective payor management strategy in place so that you prevent revenue leakage and issues such as claim denial. This article will discuss what payor management is and how it works.
What is payor management?
The majority of independent practices and clinicians have a good base of understanding of payor contracts and how these work, although it is not unusual for payors to include jargon that can alter the amount of reimbursement a clinic is able to get or how many days it has to complete a claim and which services are covered. Evidently, this can have a significant impact on how much revenue you can produce. You can hire professionals to support you with payor management so that you have effective contracts in place that will benefit you financially.
How does it work?
- A review of your business is done
Understanding your current situation is essential so you know where you need to improve. Whether you want to do this on your own or you hire expert payer contract management services to help you, the process is usually the same – firstly, you should start by reviewing the portfolio you currently have in place with the aim to pinpoint what are the areas of potential growth. You can analyze key contracts and come up with a solution to acquire more contracts.
- A suitable strategy is put into place
Once you have reviewed what you have currently in place, it will become easier for you to have an understanding of payor management and what best suits you and your practice. At this point, you can start to develop a suitable strategy to manage this and increase your revenue, as you will know what has worked for you and what has not. During this stage, you should start to contact payors, devising new contracts, and negotiating current ones.
- Appropriate technology is put into place
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Technology has made our life easier in many different ways. This statement is just as true when it comes to effective payor management. If you currently manage this with paperwork only, it will be very difficult for you to manage everything that is going on. There are a number of software programs that you can use to ensure that you keep track of every collection, claim, and overall revenue. This is essential for effective payor management.
Payor management is essential, particularly for independent healthcare practices. The information discussed above should provide you with a clear idea of what payor management entails and how it works so that you can effectively apply this to your business.
