Contract Essentials

The Challenge

In today's environment, the average hospital signs numerous contracts with managed care organizations and insurers. Many of these contracts contain provisions that hamper a hospital's ability to obtain adequate reimbursement, unduly restrict billing and appeal timeframes, allow unnamed, non-contracting organizations to discount reimbursements to the hospital, and expose the hospital to unnecessary liability and loss.

Most hospitals do not have the time or resources to review these contracts in detail, compile and analyze meaningful performance data, and monitor their financial impact. This could cause significant losses due to untimely claim submissions and appeals, increased work for staff and automatic renewal of unprofitable contracts.

How can you manage this important area of your business with limited time and staff?

Our Service

RCS will gather, review and summarize core contract and performance information for each payer and insurance product. The contract information will be prepared and presented in a summary matrix format for your quick reference, and a separate, more comprehensive summary will be prepared for each payer. RCS will update all pertinent contract information quarterly to ensure all key departments are working with the latest information. RCS can also provide expert consultation about contract modifications, bargaining strategies and other contract issues. In fact, because of our exposure to a wide variety of contractual relationships, many of our clients take advantage of our all-inclusive negotiation services.

Core contract information includes:

  • Payer contact name, address, telephone and email address
  • Term of contract
  • Rate methodologies by service w/ date of last revision
  • Time limit to submit initial claim
  • Time limit to make payment determination
  • Time limit to appeal denied claim
  • Network affiliates and other covered entities
Performance information includes:
  • Average insurance payment percentage relative to gross charge
  • Average lag time from claim submission to receipt of payment
  • Average patient responsibility per paid claim
  • Average volume and charge amount of claims denied
  • Denial breakdown by category.
  • Key considerations for improved performance and profitability

Our Approach

  • Gather and review all original contracts and applicable addenda
  • Confirm and update payer contact information
  • Work with payers to obtain key documents and validate accuracy
  • Extract and display rate methodologies in an easy-to-read format
  • Audit core sample of claims for each payer to gauge performance indicators


RCS will provide current and complete rate summaries and reports of key performance indicators for every active managed-care contract. In addition to receiving timely advice and consultation about these contracts from an experienced and objective outside source, you will be able to:

  • Understand your managed care contracts and their financial impact on your hospital
  • Educate your staff and modify your financial systems to capture all negotiated reimbursements
  • Make intelligent decisions about contract renewals and modifications
  • Respond intelligently and promptly to problems and issues concerning your managed care contracts