In order for a hospital to perform at its optimum level, communication between departments is critical. This communication between a hospital’s contracting department and the revenue cycle department is of particular importance when it comes to healthcare reimbursement matters.

Generally, a hospital’s contracting department is responsible for the drafting and negotiation of written agreements between the hospital and commercial payors. As we all know, these contracts can be legally dense with countless pages of arcane terms and provisions. Because the payors typically provide the contract templates, it’s not surprising that these contracts often include certain terms that are favorable to the respective payor.

The practical significance of the self-serving payor language in a contract may not always be readily apparent during the contract negotiations. This is why feedback from the revenue cycle department is so critical. It is the revenue cycle department that is on the front lines when it comes to dealing with the litany of payor underpayment tactics and denials. Thus, revenue cycle is uniquely positioned to identify disturbing or unfair denial trends.

Once these problem trends are identified and brought to the attention of contracting, the contracting department can take more proactive measures to address these issues at the bargaining table.  Maintaining the channel of communication between contracting and revenue cycle will lead to better contracts and puts the hospital in a stronger position to be an effective resource to our communities.

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