Hi, everyone. This is Brian Zimmerman with Becker's
Healthcare. Thank you so much for tuning into
the Becker's Healthcare podcast.
Today, we're live at Becker's twenty second annual
Spine Orthopedic and Pain Management Driven ASC in
the Future of Spine Conference,
and we're going to talk about navigating payer
contract complexity in an era of health care
consolidation.
Joining me for this conversation is Brett Spark,
cofounder and president with Auros Health. Brett, great
to see you. Thank you. Thanks for having
me. So let's get into it. For for
folks who may not be familiar with you
or or your work at Auroras Health, can
you just introduce yourself, give some some details
about your professional background, the work you're doing?
Yeah. Sure. Brett Spark. I'm the president at
Auroras, one of the cofounders.
My
health care career,
started early on in health care administration for
a large health system,
regional health system in the Minneapolis area.
And then I,
after several years, moved into the private practice
space, private practice administration,
in a number of different levels and then
started doing consulting in the same space after
a a few different practice leadership roles.
And then it became an entrepreneur, not something
I I planned on doing,
when I started my career, especially not in
the health care lane,
but figured out that there was an opportunity
through my work in private practice space, there
was an opportunity to help support practices with
their payer relationships.
And and that is really what the foundation
of of our organization at Auroras
is today is we we feel like we
can help support resource
needs.
We can support,
human intelligence needs
within the private practice space to help them
understand the complexities that exist within their payer
provider relationships.
Would you say just coming out of private
practice too or any kind of private practice,
independent organizations, you kinda need an entrepreneurial
spirit? Do you think that it was sort
of kind of a leapfrog thing for you
or or Yeah. That I'd say? I tell
a lot of people that my career really
started with the corporate environment. I worked for
a wonderful health system in in the Minneapolis
area. It was a great experience.
But then moving into the private practice lane,
you wear multiple hats, and that's what first
intrigued me with the role. And it really
kind of made that first step into an
entrepreneurial relationship where you you actually have to
understand the business side of health care, the
complexities that exist with it, what you're going
for with certain KPIs,
and then, obviously, starting your own business after
that. I I kinda went through the cycles
as you look at my career that was
unplanned,
but worked out really well from an experience
standpoint leading me into starting my own business.
Excellent. Well, here you are.
Let's get into it now in terms of
talking about sort of the consolidation environment
and the challenges,
that presents in terms of contract negotiations
for, you know, independent practices, especially.
What can these organizations do to really protect
themselves, I guess, as they're navigating a potential
consolidation and and what that means for their
contracts?
Yeah. I I think the contract challenges continue
to get worse and worse. They've always been
there. But I think the complexities
around reimbursement and the different product levels continue
to be more challenging for large or small
organizations. Private practice
struggle with this a lot just because of
a resource
underutilized
resource
layer, but even health systems
struggle with just a volume of of contracts
that are out there with all the different
payers. The complexities
that exist within them and the different product
types that are there make it challenging for
for any organization, large or small, to understand
the dynamics that exist there.
If you think of a a private practice,
they're gonna have 15 to 20, you know,
in network contracts.
And
to to ask,
an organization that isn't, you know, rightfully suited
with resources to understand the dynamics of each
individual agreement
and then take it a step further in
saying, not only do those agreements have commercial,
they have Medicare Advantage products, they have supplemental
Medicaid products within them, and multiple commercial lanes
within them. You're taking
15 to 20 contracts, and and in all
reality, it's it's 60 to 70 when you
break down the complexities and and the need
for understanding each of those to to generate
revenue. So I think that's the biggest challenge
that exists right now. It's it's looking at
that volume of
of agreements with the payers
and having the resources set up to be
able to understand them. And I think that
is leading to a lot of organizations saying
we just we can't succeed in in this
environment. We have to look for other opportunities.
And and the consolidation might be,
within
a a health system consolidation or private equity
consolidation lane. But, also, there's a lot of
of new opportunities that are popping up with
MSOs, with IPA relationships that are valuable, and
and they provide resources, not necessarily
a a full scale sale.
Yeah. Yeah. And to your point about the
complexity of these arrangements, it's not like they're
getting less complex either. It's sort of going
the other direction. We're going the wrong way
with a lot of these right now. Yeah.
So speaking to that then, I guess, like,
what kind of blind spots can organizations have
as they're they're trying
contract wise, where they may be missing the
ball? Yep. I think
it's it's a big area of challenge
just because of the volume in which they're
they're looking at these. A lot of the
blind spots are just in the fact that
practices look at their highest volume payer, and
that's where they focus their attention because they
can only look at one or two or
three of them. So they focus on that
on those, and they miss
opportunities that exist with other payers that are
in their their portfolio of relationships. So I
think that's a big part of it, just
your your lack of time and and resources
to be able to understand all of them,
not just the biggest ones
because the opportunities might be with with others.
But also looking at the front and back
end of the relationship with with those individual
agreements. So understanding the terms and conditions on
the front end is is really important,
but then having some level of a payment
integrity
platform or payment integrity process set up on
the back end of those relationships to know
if there's revenue
leakage, if there are terms that the payer
are are not keeping their end of the
bargain up with.
Those are things that allow a lot of
of these lanes of of revenue to kinda
creep out and not make their way to
the practices themselves. Yeah. Yeah. For sure. And
the the good news is, though, I I
guess here, Brett, is that there is technology
and and data available more so before for
for these practices to leverage. So
lot you hear a lot about having a
data driven contract negotiation
strategy. What does that look like in your
opinion? An effective, I guess, contract analytics strategy
is how to frame it. What does that
look like? Yeah. I I say, you know,
during a lot of the the talks I've
had recently, I've said there's never been
more data available specific to reimbursement in the
health care link. You you can get anything
that you want even down to transparency information
that historically hasn't always been there. But
having actionable data, data that's specific to your
organization is where a lot of practices and
and even larger health systems are challenged with
utilizing the data to to make decisions off
of it. I think the biggest
opportunity from the data specific to negotiations
is digital. You you have to move your
contracts with these payers into a digital environment,
and you have to do that to be
able to layer in your practice specific information
and get line of sight to where opportunities
may be or where there might be leakage
or
a different understanding from what you thought that
contract was actually set up. So we are
in a age now where everything's digital. Your
contracts with your payers should be in a
digital environment.
I I cringe when I when I talk
to practice leaders who said they just spent
the last quarter
having an intern or having somebody within their
organization,
get all their contracts and fee schedules and
put them into an Excel file so that
they understand where they're at. And that's that's
great. I'm I'm glad they're taking
some initiative to look deeper into these agreements,
but you also have to understand that they're
not stagnant.
They're they're going to change. The pricing is
going to change with those even if the
contract language
doesn't change. So you have to put them
into an environment where they can evolve,
where you can have line of sight to
to the changes in the the pure reimbursement
pricing of each of those. Yeah. So I
guess what you're laying out here, though, is
really a holistic approach, which is different than
just, you know, going out there and trying
to get better rates. It's sort of a
different different approach here. So, I guess, can
you share
a specific example of what this looks like
when an independent organization is able to pull
it off?
Yeah.
I think that's true. Every everybody wants to
be paid more. They wanna be paid fairly
for what they're doing. The big thing that
we've
learned within our organization, and and part of
that is just scale. We we do hundreds
of contracts a year, and it's all we
do,
is looking at the contractual side of the
relationship with payers. And, yes, that does lead
to to better rates, but,
really, what you're looking for is a clear
understanding
at a code level, at a procedural level
of
where exactly and how exactly you're getting paid
from each of these payers. One one example
of that is we had a a client
that came to us that said, you know,
we have a really good contract with X
Payer. You can insert name. They're whatever you
want. So we don't wanna disrupt that, and
we said, absolutely not. We we don't want
to either. He said, we're getting, you know,
over 200% of Medicare. And in that region,
that was fantastic for a
problem. When we went out and broke that
agreement down,
they were getting 200%
of Medicare on about 5% of the actual
volume that they were sending out.
And the rest of their agreement with that
payer was broken down in in different percent
of Medicare based on
on subcategory
levels, some of which were a 105%,
some of were a 150%.
But the the point is it was all
over the board, and the practice had an
understanding of of one thing and missed an
opportunity in another lane.
In that same practice, they had a heavy
APP environment,
and they were getting
70% of APP rates, which is well below
what what you theoretically should get when you
look at market rates for that. And that
was just a a terms and conditions,
understanding that they didn't know the dynamics that
existed within it. So it it's important. Yeah.
That's a that's a great example, to to
ground the conversation with Brett. Is there anything
you wanna share that we didn't touch on
or anything, I guess, you might wanna reemphasize
for listeners?
Yeah. The the biggest thing is, you know,
that the narrative
historically
has been
payers set the rates. You you get what
you get from a payer relationship perspective,
And that's made it challenging to kinda break
through the ceiling of saying
you're you're still in a contractual relationship with
these payers. And I think it's important to
understand
where you have opportunities,
and they're gonna present themselves if you put
the right resources in place, whether that's an
external partner or you build the team internally.
Both can can lead you to success.
But it's now an age where you you
have to look beyond just the regular
revenue cycle management teams, the claims that are
going out the door. You have to look
at the front end of the relationship and
and the payment integrity side of the relationship
too, or you're gonna continue to to see
margins shrink and and be more challenges long
term for practices. So
doing something is is better than nothing when
it pertains to just the legal side of
your relationship with payers. Certainly. Well, Brett, it
was truly a pleasure speaking with you today.
Thank you so much. Yeah. Thanks for having
me.
We also wanna thank our podcast sponsor, Aurora's
Health. You can tune into more podcasts from
Becker's Health Care by visiting our podcast page
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