Thought Leadership

Payor Games and How to Play Them: Lessons from Expert Litigators

By Revive
posted Nov 15, 2023

Summary of virtual Summit Series session, featuring Meri Gordon and Adam Dietrich, Shareholders at Polsinelli

Revive’s virtual Summit series is underway, where we host conversations with the best and the brightest experts in healthcare about the challenges facing healthcare providers — and what to do about it. In this session, Revive sat down with Meri Gordon and Adam Dietrich from Polsinelli, a top law firm working with health systems and provider groups on critical issues they face in managed care contracting and payor disputes. Revive picked Meri and Adam’s brain about the games payors continue to play as they cook up creative strategies to shortchange healthcare providers through denials, underpayments, site of care restrictions, and non-payments — and the impact these strategies have on people’s access to healthcare services and, ultimately, their health.

What are Payor Games?

Payors are finding more and more ways to chip away at what they pay for care through a variety of increasingly clever strategies, all of which have the ultimate impact of reducing what gets reimbursed to healthcare providers which, in turn, impacts patient care. Denying claims is only the beginning of payors’ strategy to avoid paying for services. To make matters worse, a lack of transparency leaves healthcare providers with little to no insight into these payor games — and how to beat them.

Payors are forcing bigger discounts beyond what is negotiated and modeled, and actual payments are not matching up with expected payments. Payors have not invested in the infrastructure to make the process easier, faster, or for their payments to be timely and transparent. As a result, net revenue targets are not being met for providers, who are left with a significant discrepancy that is hard to understand. And, unfortunately, there isn’t an adequate process in place to challenge payment practices, short of litigation.

Payor Games in Action

Payors reduce reimbursement through two methods: technical denials and clinical denials. Some examples of technical denials include lack of pre-authorization, lack of documentation, improperly coded services, untimely filing of claims, and the patient not being covered by the plan at the time of service. Examples of clinical denials include level of care, length of stay, medical necessity, site of care, and payor policy changes.

Not Separately Reimbursable (“NSR”) denials are one of the hottest games that payors are playing right now. These technical denials are line-item denials made on the basis that certain supplies, services, and billing codes are allegedly considered not separately payable because they are allegedly “routine,” included in the room and board charge, or are an integral and necessary component of another procedure or service provided. Through these NSR denials, payors are interfering with a provider’s right to set charges, bill, and be paid in accordance with HIPAA / CMS Rules that apply to all providers and payors.

How Health Systems Can Fight Back

There are legal strategies you can take to combat these payor games. Make sure that you check your contracts to ensure compliance with required appeal and dispute escalation procedures. Also, check your contracts to see if there are time requirements for such appeals or for initiating litigation. The different forums for resolving legal disputes include mediation, arbitration, and a lawsuit.

There are many reasons why you should litigate to combat aggressive payor behavior. One reason you might litigate is if the payor is not coming to the table or stringing you along – further delaying rightful payment owed. The most important benefit of litigation is you’re preserving the right to pursue the claims that are in dispute because those claims are generally subject to contractual and statutory time limitations for filing suit.

Don’t Wait – Get Started Today

If your organization needs help evaluating legal options surrounding managed care contracting and payor disputes, please contact Adam Dietrich (ADietrich@Polsinelli.com) or Meri Gordon (MGordon@Polsinelli.com), Shareholders at Polsinelli.

If your organization needs help preparing for a public dispute with a payor, please contact Sasha Boghosian (SBoghosian@reviveagency.com), Chief Strategy & Innovation Officer, Revive.

Did you find this content helpful? Don’t miss the rest of the Summit Series, where we bring together top managed care executives, legal experts, and renowned thought leaders to discuss the state of our industry and how we can chart a successful path through its challenges. Register for the next session in our series here.