With increasing financial volatility in the healthcare industry, it is imperative Practice Administrators and Managers ensure their practices receive top dollar for rendered services. Insurance payers set out to negotiate the smallest reimbursements possible for services at terms that are frequently unfavorable to the medical practices under contract. Negotiating payer contracts does not have to be a losing battle if you have the tools needed to ensure your clinicians are being reimbursed fairly.
Remember, the time to fight for what you want is before a contract is signed.
Whether you are reaching out to a new or existing payer, or on the receiving end of a contract request, take the time to outline what you (the practice) is looking for and be prepared to present why. Two of the most important aspects in any negotiation process is knowing your payers and your practice's market data.
Begin by assessing your situation and answering these questions:
- Does your practice hold the market for your specialty in the area? Do other practices in your area and of the same specialty accept the same insurance plan(s)? Know your competition (if any).
- Knowing why the payer is wanting to contract with your practice is important. If they are wanting to branch out into your area, you have the upper hand. If other practices around you cease contracting with certain payers, leaving you as the primary market shareholder... use this to your advantage.
- What do other payers pay you? Use your favorable fee schedules to your benefit.
- What is our payer mix? It is important to have a healthy balance to provide adequate access to patients in your area.
It is important to remember that a plan's "sellability" is greatly influenced by the ease of patients' access to in-network providers. Take these steps to set your plan:
- Know your position.
- Set your goals (reasonable and attainable).
- Be prepared to negotiate.
- Know when to walk away.
The tiresome process of going back and forth, but don't let it wear you down. I have been through enough payer negotiations to have experienced some more frequent tactics used by payers to come out favorable to the payer. If you are prepared to counter these tactics, you are half way there.
- Delay tactics. Never-ending cycles of emails and communications back and forth that seem to keep negotiations ongoing with no "light at the end of the tunnel". Payers hope you get tired of the process and settle to their terms. Stay strong!
- Take it or leave it. Hearing the phrases "accept all of our plans or none", "this is what we will pay or nothing at all". Call their bluff. Most payers do not want you to walk away, they need you for business.
- Lacking authority. The negotiator may state they need approval from another department or manager to your requested contract terms. This is simply another type of delay tactic used in hopes of getting you to drop your requests and settle.
Make sure you fine tooth comb the entirety of the initial contract, not just the reimbursement rates.
- Payment terms. Are the payment terms to your standards (60 days versus 90 days)?
- Be alert to burden of timeframes. How about timely filing? Medicare allows up to 1 year, there is no reason why you can't request the same from other payers.
- Timeframes allowed for appeals. Make sure you request the timeframe that works for your practice workflows.
- Arbitration clause. Should it come to litigation, where do you want the litigation to take place? Think of the time and costs associated with you having to travel to their state of headquarters.
- Hold harmless clause. Negotiate for a shared liability for you and the payer. Do not let them shift 100% of the liability to your practice.
- Know your CPT codes that drive your practice's income. Obtain clarification on reimbursement from the payer for some of your most used CPT codes. This should include E/M, J codes, Admin and other ancillaries.
- Use hospital costs as leverage. Most hospitals reimbursements are 3-5 times more than those of a medical providers office. Use this as leverage to saving the payer money by doing certain services in-house versus referring out to nearby hospitals (such as infusions). This a tactic I frequently hold "in my back pocket". Payers ultimately are trying to reduce their bottom-line.
Once you have agreed on contract terms, it's time to start the credentialing and onboard process. Remember to alert your staff and providers of the change. If it is a new payer to your practice, it's a great idea to let referring providers in your area know the insurances your practice accepts. Use your post-negotiations checklist to ensure continued success:
- Payer Audits - Ensure your reimbursements are matching your contract terms. This should be done quarterly.
- Yearly Payer Review - Assess your current payer mix. Are the payers you are contracted with still beneficial to your practice? Are they still paying you at an equitable level that fits the needs of your practice?
- Credentialing - Bringing on any new providers or APPs? Standardize your onboarding process to ensure every new provider is credentialed the same as existing practice physicians and APPs.
Negotiating contracts do not have to be scary. Using the tools provided can ensure a smooth process, reducing headache and frustration and ultimately ensuring your practice is paid fairly for the care you provide to patients.
