Payer Policy Changes: How Providers Catch Updates on Time to Avoid Denials

With denial rates now at 15%, finding all in-house sources of inaccurate claims is critical 

One particularly frustrating reason behind denials is missed payer policy changes. 

Two weeks ago, the claim would have sailed through. 

Today, because of a missed piece of mail or lag in accessing a payer portal, payers won’t pay. Now you’re stuck reworking and resubmitting, a process that, per claim, costs anywhere from $43.84 according to Premier and $118 according to Change Healthcare. 

These amounts may not even reflect the true overall costs of denials. Figure in the ones you just decided to eat. For low-value claims, physician groups and MSOs often determine that reworking isn’t worth the time and effort. You pay that claim 100%. Too many of those, and you have meaningful revenue leakage over time. 

You may think you and your team just don’t have the bandwidth to keep up on payer policy changes right now. With the orientation provided here, however, you could streamline your approach so that you not only know when a change comes in, but also push back on it if it threatens to diminish your revenue. 

Getting claims right on first submission is the ultimate goal. When you’re on your payer update game, you improve your first-pass rate, reduce your denials, and improve your revenue long-term. 

What are payer policy changes?

Payer policy changes are updates or modifications made by health insurance payers–including private insurers, Medicare, and Medicaid–to their rules governing reimbursement rates, coverage criteria, billing and coding requirements, contractual items, and prior authorization processes. 

How payer policy changes impact revenue cycle performance

The increasing frequency and inconsistency of payer policy changes have tangible effects on provider revenue cycles. The potential detriments payer policy changes pose to healthcare organization revenue are: 

• Rising denials: More frequent changes lead to higher rates of claim errors and denials, especially when providers miss or misinterpret new requirements.
• Longer reimbursement cycles: As providers scramble to adapt, the time to payment is increasing, putting additional pressure on cash flow.
• Administrative burden: RCM teams must devote more resources to monitoring, training, and system updates, diverting attention from patient care and other priorities.

Frequency of payer policy changes

Payer policy changes are now a constant in the healthcare landscape, with updates arriving unpredictably–sometimes monthly, quarterly, or even more often, depending on the payer and the regulatory environment.  There is no industry-wide standard for how or when these changes are communicated.

Payers change and update their policies anywhere from a handful of times each year to dozens. Medicare has official annual and quarterly updates, but also “ad hoc” updates. Commercial payers vary on update frequency, but, as they follow Medicare changes, you can assume at least 10 per year. Federal and state regulations, such as ongoing adjustments to Medicare and Medicaid payment rules, actually require payers to revise their policies throughout the year. 

Specifically, payer updates are becoming more frequent, with 77% of healthcare revenue cycle leaders noting more payer policy changes this year, up from 67% in 2022. 

The frequency of payer policy changes is rising due to a combination of regulatory updates, market pressures, and administrative complexity. At the same time, advances in medical technology also drive frequent updates to coverage and reimbursement criteria. Compounding these factors, the sheer number of payers in the U.S.--each with its own unique requirements--creates a complex landscape that providers must constantly monitor and adapt to. 

How adept are providers at managing payer policy changes?

As we’ve shared in all our blog posts, providers are struggling mightily with revenue cycle teams that are too thin and overburdened to stay current on their payer contracts. To expect you to find the capacity to update those contracts with intermittent payer policy changes could be too much to ask. 

Still, the reality remains that only by understanding payer rates and terms in your payer contracts is critical will you maximize revenue. Without that payer contract data and insights, you have little control over revenue changes. In fact, you operate at the payers’ whim, using contracts with no annual escalators that are full of terms that favor payers. 

Providers without contract management control turn a blind eye to the contract changes that come in throughout the year as well.

One of the biggest obstacles in conducting this important contract work is the fact that each payer has its own way of sharing proposed policy changes. Blue Cross Blue Shield’s Blue Review newsletter publishes significant changes to physician fee schedules and other updates like the annual Schedule of Maximum Allowances. Its provider portal also lists updates. UnitedHealthGroup uses email and portals, and Aetna encourages providers to stay on top of fee schedule changes via its Availity provider portal. The result is a patchwork of notifications, bulletins, and manual updates that providers must constantly monitor. 

Healthcare organizations’ options for remaining current on payer policy changes

By proactively tracking payer updates and modeling their impact, providers can reduce denials, accelerate reimbursement, and maintain financial stability. Staying one step ahead is not just a best practice–it’s a necessity for successful revenue cycle management today.  You can handle this important task either in-house via available staff or new hires or via 

A 6-step in-house staff payer policy changes management approach

1. Locate all contracts and consolidate them in one accessible repository. 
2. Assign dedicated personnel who rigorously follow a set schedule-daily, weekly, or monthly-to proactively monitor these sources for each significant payer.
3. Begin with obtaining and thoroughly understanding the most recent contracts for all key payers.
4. Note any clauses specifying how amendments and policy updates are communicated. 
5. Identify all potential channels the payer might use, including dedicated payer websites, provider portals (Availity?), email newsletters (requiring diligent inbox and spam folder checks), and traditional mailings.  
6. Document updates and promptly disseminate the information to all affected internal departments (e.g., billing, coding, pre-authorization, scheduling) so that operational workflows, billing rules, and system edits can be adjusted manually before claims are submitted.

If unleashing this workflow on all of your contracts feels daunting, consider prioritizing just those contracts representing the highest volume or revenue.  

To take a few more steps back, if finding and making sense of your payer contracts feels impossible, you might want to consider payer contract management. This software ingests, digitizes, and centralizes contracts and then performs analysis on this data so you can: 

• Identify revenue lost due to underpayments and denials.
• Pinpoint root causes of revenue leakage to prevent them from occurring again.
• Compare payer contract performance to determine which has the best rates and terms, and thereby the best value for your organization.
• Analyze how proposed payer rate changes will impact your revenue.
• Empower you to use benchmarking data to negotiate for better terms. 

When working with a contract management solution provider, you can leverage the knowledge that not only is embedded in the software itself, but that you receive via working with the customer success team. Their quarterly reports and regular support guide you through establishing a powerful healthcare contract management lifecycle that optimizes your revenue.

Take a quick, self-guided tour through a powerful contract management, denial management, and underpayments identification tool:

Automated payer policy changes alerts

Should managing payer policy changes in-house just register as impossible to you, several software solutions exist to handle this work. Automating payer policy alerts severely limits missing them.

This technology is designed to scan all known sources where policy updates might be posted, like payer websites, e-newsletters, and third-party websites. (Note: as they operate digitally, they won’t cover traditional or “snail” mail.) These tools then consolidate that information and deliver a report to providers, sometimes as often as daily. With the software at work, staff escapes combing through payer websites and crowded inboxes.

Many of these solutions that automate payer policy alerts take it a step beyond just notifications, providing summaries of the changes, links to the affected policies, and breakdowns of the changes by specialty. Summaries can help mitigate confusion. Some also even break down the changes by specialty to ensure that providers don’t waste time sifting through policy adjustments that don’t apply to them. 

After change discovery, software automates edits to billing and clearinghouse

Finding payer policy changes is just the first step toward improving your first-pass resolution rate, dropping denials, and preserving your revenue. 

In most health care organizations, once a payer policy update is identified and understood, the billing department will need to either manually update or request an update to the chargemaster or add to/edit a billing edit. In some cases, this process happens retrospectively and therefore doesn’t ensure that all payer policy changes are taken into account at the time they are put into effect.

While some technology solutions automate only the detection of payer policy alerts, others carry out that task and also leverage the information in the updates themselves to automatically identify claims where reimbursement will be negatively affected before they’re sent to payers. To automate this process, such solutions use a massive knowledge base of the latest payer guidelines to create actionable edits for billing and/or coding teams to resolve before the claim is sent to the payer.

Taking advantage of this type of automation enables providers to proactively avoid denials, underpayments, and compliance risks by efficiently hardcoding all payer policy changes into the revenue cycle’s workflow. Doing so also ensures that the reimbursement is optimized for the health care services and care provided.

Software can also automate coding

Ideally, payer policy changes get implemented during the coding stage to avoid unnecessary back and forth between the billing department and coding staff. However, this would likely add a significant administrative burden to coding staff, who are already stretched thin.

That’s where automated coding technology comes in. Today, the software platforms that monitor payer changes and shunt these edits to billing and clearinghouse also implement payer policy changes during the coding stage of the revenue cycle. They can get this done without even interfering with your coders. These solutions use a rules-based approach to implement standard coding guidelines from CMS and AMA, as well as providers’ internal coding guidelines. This ensures that the codes assigned by these solutions are always compliant.

Just as these solutions are configured to align with CMS and AMA guidelines, they can also be configured to include the latest payer policy changes related to coding or documentation. By leveraging automated coding technology that’s capable of such configuration, providers can ensure that their medical coding is compliant, mitigate the need for retrospective edits, and reduce the risk of coding or modifier-related lost revenue.

Get started with automated payer policy changes management

Given how rapidly the health care landscape is evolving, payer policy changes to processes and policies will likely become more complex in the coming years.

Most healthcare leaders urge physician groups, practices, and healthcare MSOs to use technology that proactively improves the efficiency of payer policy management. 

But where should healthcare organizations start? 

It’s ideal to implement such processes and technology early in the revenue cycle to proactively reduce compliance issues down the line. That said, this approach may not work for all providers. 

Providers can also start by identifying which stage of the revenue cycle drives the most denials and underpayments. For example, do your payer compliance issues stem from front-end processes like insurance eligibility, or are they caused by noncompliant coding or documentation later in the revenue cycle? 

Answering questions like these will help providers select the solution that will drive the biggest improvements to their claims denial rates, underpayment rates, and payer policy management processes. What’s important is getting started now.

Here is a list of software companies that provide solutions for monitoring, automating, and managing payer policy updates for healthcare providers:

• Availity: As the nation’s largest real-time health information network, Availity is a comprehensive, multi-payer provider portal that streamlines communication and data exchange between providers and payers. Availity delivers messaging and notifications about payer updates and workflow changes. Its platform reduces manual processes, helping providers efficiently manage policy changes and administrative requirements across health plans. Still, not all payers use Availity, leaving providers on their own to use individual payer portals, emails, and snail mail notices to stay up with changes manually. 
• Experian Health (Payer Alerts): Offers automated payer alerts that deliver timely notifications about payer policy and procedure changes, including detailed summaries and links to affected policies. Experian’s Payer Alerts service monitors over 58,000 web pages operated by 475 insurance companies. 
• DataRovers (Luna):  Tracks real-time payer policy updates and simplifies policy tracking for providers. 
• HealthEdge (Payer Source): Automates the identification, repricing, and reporting of retroactive CMS policy changes, helping payers and providers manage compliance and reduce administrative burdens. The platform automatically updates pricing and editing content libraries every two weeks, with comprehensive access to claims history for history-enabled editing.
• Myndshft: Specializes in prior authorization software that helps providers keep pace with constant payer policy changes, particularly for prior authorization requirements.
  

As you evaluate each, make sure to inquire about whether they stop at simple monitoring and alerts or whether they have functions and features that send edits to billing and your clearinghouse and even implement these changes in your contracts and claims. 

MD Clarity: Contract management above & beyond payer policy changes 

Payer policy changes aggravate revenue cycle leaders and CFOs in every healthcare organization. Margins are just too thin anymore to tolerate missing these updates. Orienting current staff or even bringing in new FTEs to monitor payer updates and incorporate them into your claims management system is one way to stop the denials stemming from missed updates. For those organizations that cannot invest in additional staff, technology can automate these tasks efficiently, and at a positive ROI. 

MD Clarity partners with the payer policy change monitoring platforms. Our contract management and monitoring solution, RevFind, optimizes contracts from several other directions. It provides the foundation for contract management by centralizing, digitizing, and analyzing payer rates and terms. It reveals which payers are underpaying which CPT codes, which of your locations seem to be plagued by underpayments and denials, and which payers have the best rates. It stacks performance of payer contracts against each other so that you can see which is providing the most value.  This information comes in handy at contract negotiation time. It also models the impact of proposed payer policy changes to overall revenue. These insights help you make data-driven decisions. 

 Schedule a demo to see how RevFind can ingest your contracts to render full visibility, insights and negotiation levers.  

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