Let’s begin with answering the question “What is are closed payer networks?”
Closed Payer Networks Defined
Closed payer networks are a payer network that currently have participating (par) providers, like you, and, therefore, is not adding more similar providers, including you, to their network. A narrow network means it has enough par providers of a certain type and are generally not looking to expand further.
Since many payer networks are already complete, it is often challenging for providers to get contracted. In working every day with a broad range of providers, my experience is that this challenge is especially prevalent for certain medical practices.
Therefore, the question is what can you do as a provider of valuable medical services to get into a closed or narrow payer network?
Step 1- Value Proposition
Don’t assume the worst. Prepare a value proposition / proposal letter and get it to the payer contracting manager (not the provider relations manager). If you write a strong enough value proposition the payer just may say “yes” and you are contracted.
However, as the old saying goes “hope for the best but prepare for the worst.” Value propositions can be built based on product differentiation, service differentiation, geographic coverage and referrals. Therefore, if you receive a “Thanks, but not interested. “reply then go to Step 2.
Step 2- (Very important)- How to respond to objections
Often the objections will be centered on the fact that there are already a small number of companies / practices in a payer’s network fulfilling the networks requirements for services thus seemingly leaving you left out. See if you can find out who the par providers are and what your competitive benefits are vs. those already in network and be prepared to introduce price competitiveness into the negotiation as part of the value proposition.
Realistically, if you are turned down to be a par provider, you will need to both demonstrate specific service and / or product and distribution advantages compared to those already in the payers’ network and likely also need to beat their pricing. Since it will not be apparent what the competition’s pricing is, simply tell the payer to make you their best offer and you will seriously consider beating the pricing of their in-network providers.
You can always choose to not participate if it turns out that the pricing is too low to meet your profit margin goals. However, if you ask for an offer and get assertive on pricing, there likely won’t be an offer forthcoming. But price competitiveness, alone, likely will not get you to the finish line. You will need to demonstrate other compelling benefits compared to the existing par providers.
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Written by Steve Selbst, CEO and Co-Owner of Healthcents Inc., www.healthcents.com.
The experienced and talented staff at Healthcents have negotiated thousands of payer contracts over the years, covering all types and sizes of practices, ASCs, and ancillary providers including DME, labs, skilled nursing facilities and home infusion companies. This experience has opened our eyes to many creative techniques to assist providers to get contracted into payer networks.