How to grade your payers by the staff hours they cost

Grade each payer A to F on staff hours per claim, state the staff hours as full-time staff, and bring the grade to your renewal.

Nate Peereboom
Co-founder, JotPsych

Your biller spends hours each week on one payer's denials, records requests, and phone calls, while another payer pays you about the same rate and takes far fewer staff hours. You're up for renewal with the first payer this year.

1. Count each payer's claims and your staff hours on them. Use last month. Include your staff hours on denials, records requests, and phone calls, but leave out your rejected claims, since the payer didn't decide them. Premier Inc. found that fighting one denied claim from a private payer cost hospitals an average of $43.84 in 2022.
2. Grade each payer A to F on staff hours per claim. Divide each payer's staff hours by its claims. Give an A to the payer with the fewest hours per claim and an F to the payer with the most. Payers "have no idea they're causing chaos on the practice side," said Doral Jacobsen, whose firm grades payers.
3. State each payer's staff hours as full-time staff. Add up your staff hours on each payer for the month, and divide by one full-time employee's monthly hours. Jacobsen tells payers, "This is two FTEs," meaning two full-time employees: "two human beings that we are paying $75,000 a year."
4. Ask each payer to cut your staff hours or pay more. One of Jacobsen's clients was "getting hammered by prepayment audits," reviews a payer runs before it pays a claim. Jacobsen's firm asked the payer to remove the audits or pay 5 percent more on evaluation and management codes. The payer removed the audits.

Grade your top three payers. Beside each grade, write your staff hours on that payer last month. Bring the grades and the hours to your renewal.