Everything You Need to Know about Payer Contracts and Provider Verification

Everything You Need to Know about Payer Contracts and Provider Verification

Oct 6, 2021
  • Author:
    Noelle Abarelli

Payer contracts are a vital part of the healthcare system. They impact everything from reimbursement rates to provider credentialing. With the right information, organizations can negotiate great payer contracts and generate more revenue throughout the year. Here’s what you need to know...

What are Payer Contracts?

Payer Contracts define and explain a provider’s reimbursement arrangement for delivering healthcare services within different plans. Payer contracts cover reimbursement rates, provider networks, medical necessity, and provider credentialing, all of which has an impact on negotiating rates, benefits, and more.

What to expect from a Payer Contract?

Every organization is going to have variety in their payer contracts, but there are some aspects that come standard to any negotiation. For example, general terms and conditions, provider and group obligations, company (payer) obligations, network participation including participation in products, notice information, dispute information, and rate schedules will all be present.

While contract specifics may vary, there are some basic steps every organization should follow when setting up a payer contract.

  • Analyze - Each organization’s payer contracting director should look at the variety of payers available to determine which payers to request a contract from, at which locations, as well as which products they will want to participate in. The director's goal is to analyze each payer offering to determine how it will work best with their organization’s needs.
  • Initiate - Once an organization has an idea of the payers it wishes to work with, it will initiate/request contracts with each payer for the product(s) they want to participate according to determined specialty, specific location, and particular product requested. Services can include Commercial Health, Medicare, Worker’s Compensation Network, etc. Directors can select what services they want to participate in, they do not need to select all services provided.
  • Compare - Once a contract is received, the contracting director will review comments from and/or changes requested by the payer. They will look at the rates each payer is offering, the terms they must agree to, and who is responsible for what. This is where the negotiation begins.

Negotiations take time and involve a lot of back and forth. This is an opportunity for the contracting director to make requests for both “nice-to-have” and “needs to have” requests. Larger organizations will likely be involved in multiple contract negotiations at the same time. After negotiations are completed, the payer contract process is finally done. Because negotiating payer contracts can be a long and complicated procedure with a lot to keep track of, a solution like CredentialStream can be a great asset.

How does CredentialStream facilitate payer contracting?

CredentialStream allows the entire payer contracting process to be saved and tracked. As contracts are sent, changed, and new ones created, they can all be saved and viewed in an easy to use dashboard. This provides a record of the entire negotiation. With CredentialStream you can note whether a negotiation is complete or add in a follow-up date if necessary, meaning you never lose track of negotiations. The final contract can be stored in CredentialStream, and one can even add in contract-specific workflows.

CredentialStream also stores fee schedules which means your entire team can reference documents specific to clients and location and have all the details they need to process a request. Most importantly, CredentialStream can help your organization ensure its being paid the appropriate contract rates. After all the back and forth of negotiating certain rates, it is critical to make sure you are being paid the agreed upon contract rates.

What about PAR and Non-PAR?

The Medicare participation status for your providers can have significant financial consequences on your organization. Your choices are a Medicare Participating Provider (PAR) or a Medicare Non-Participating Provider (non-PAR). It’s important to take a minute to understand the difference between these statuses to avoid claim denials and wasted time.


Participating (PAR) providers and suppliers agree to accept assignment on all Medicare claims.

If a group is contracted but the provider is not credentialed, then the provider is Non-PAR. Being solely credentialed/enrolled is not the same as being considered PAR. When a payer says they are linked, it again doesn’t necessarily mean they are PAR.

Non-participating providers and suppliers sign no agreements, and may choose on a claim-by-claim basis whether or not they want to accept a Medicare assignment. The most common reason for a provider being Non-PAR is because they are not credentialed, re-credentialed, or re-validated for that particular plan.

A provider could be credentialed and linked to a contract, but not to all payer products (HMP, PPO, Med Adv., Medicaid, Exchange, Narrow Network, etc.) That’s why it’s important to do a little research to make sure they are linked to all the products to avoid rejections that ultimately lead to delays and lost revenue.

Most Common reasons for Non-PAR

  • Not credentialed or not re-credentialed
  • Credentialed but not linked to the contract
  • Credentialed and linked to contract but not to all payer products
  • Contract may not include all products
  • Panel closed for specialty or provider type

How can I best manage Payer Contracts?

An organization will be better equipped to handle payer contracts if they are contracted to be in network with the right payer and products. With payer contract knowledge, organizations can avoid the adverse impact of denials, lower out-of-network payments related to Non-PAR providers, and more. CredentialStream’s database allows you to mark which providers are PAR and Non-PAR with Medicare/Medicaid. Users can mark that someone has opted in or out including the date so they can keep checking to ensure they are still opted in or out. Because each product has multiple fee schedules, CredentialStream allows users to attach multiple files per product. With CredentialStream, organizations can easily research each provider status with all payers and products to stay on track. Request a demo today.