Process and technology that helped Sturdy Memorial improve payer negotiations, collect additional $50,000

While the world continues to come to grips with the COVID-19 pandemic, the move toward value-based contracts continues. A recent survey of healthcare leaders showed that 41% believe the pandemic would push the industry further away from fee-for-service reimbursement toward value-based care contracts. The sentiment was uniform across industry players, including hospitals, payers, and physician groups.1

To manage expected revenues and costs, providers must model their contracts to gain the necessary insight into current contract revenue, expenses, and the financial impact of a new contract. Providers should also model their government contracts like Medicare and Medicaid — although they cannot be negotiated, understanding the impact on your bottom line can aid contract negotiations with private payers.

Syntellis’ Axiom™ Contract Management can help healthcare finance professionals automate key contract management processes such as tracking contracts, evaluating new/amended contracts for revenue impacts, and ensuring compliance with terms. The software provides insights to aid contract negotiations using facts to avoid contentious interactions and support positive working relationships with payers, delivering an overall advantage to key contract management processes.


Identifying top payers and negotiating wisely

At a macro level, hospitals, health systems, and provider organizations need to understand how every payer fits into their revenue mix and how revenue breaks down by inpatient/outpatient care. Pay particularly close attention to those contracts that represent the majority of your income and how your health system or provider network fits into a payer’s coverage area. Being the only game in town or dominating a service line can give you a leg up during negotiations.

Securing a copy of any proposal well in advance of negotiations and entering proposed cost figures into Axiom Contract Management makes it easy to determine the financial impact, service line by service line. At a minimum, you should compare the highest volume and highest cost procedures against the contract terms. Also include historic denial percentages into your calculations: a 5% increase means nothing if 5% of claims get denied.

Finally, remember that it’s easier to ask for 3% more each year than 9% more every three years. Presenting data on the current contract and modeling the proposed contract will help you make the case for the reimbursement that you expect in a counterproposal.


Data-based negotiation in action at Sturdy Memorial Health

A nonprofit, acute care community in eastern Massachusetts, Sturdy Memorial Health was presented with what the payer called a revenue-neutral contract that moved the hospital from percent of charges to inpatient APR DRGs and outpatient fee schedules.

Using Axiom Contract Management, the hospital modeled the effects of the proposed contract, which tracked correctly on the inpatient side but introduced reimbursement discrepancies on the outpatient fee schedule. By trusting the data, the hospital presented a counterproposal that substantially reduced the potential loss.

“In the past, performing a payer review was a very manual process,” said Jeanine Levinson, Director of Budget and Reimbursement for Sturdy Memorial. “We compared actual payments to charges and did all of the analysis in Excel. With Syntellis’ help this time, we were able to look at the whole picture easily.”

Once the contract was negotiated and implemented, the analysis didn’t stop there. Again using Axiom, the hospital determined that reimbursement amounts were not matching projected totals. By running reports and speaking with the payer, the hospital realized billing flaws that prevented additional reimbursement on certain surgical procedures.

Since the issue was uncovered during the payer’s 90-day dispute window, Sturdy Memorial resubmitted those claims and received $50,000 in additional revenue.

“We were very limited in the amount of data we could grab before using Axiom,” Levinson said. “Now we have a much more robust data set, good experience under our belt, and a system that gives us confidence.”


Securing every dollar

Managing and modeling contracts need not be burdensome or time-consuming, and using the right tools can help you better manage contracts, claims, and payments across your organization by every source. The process starts with having the right data, then using a robust contract management tool that can model “what-if” scenarios to present an accurate reimbursement picture. During the contract period, the same software can ensure that contract terms are met and proper reimbursement is received.

Because in healthcare, every dollar counts.


Discover how Axiom Contract Management improves efficiencies, increases collections, reduces denials, and supports better payer terms to deliver a quick return on investment (ROI).

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Sokol, E.: "Coronavirus Pandemic Impacts Value-Based Contracts." RevCycleIntelligence, Sept. 8, 2020.

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