6 Pay-Up Winning Contract Renegotiation Tactics

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6 Pay-Up Winning Contract Renegotiation Tactics

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Renegotiating Payer Contracts

You can increase how much your third-party contracts pay. But it’s not easy. Insurers won’t help you to the money that’s just waiting on the table.

And you may lack the confidence and experience to overcome their sneaky contract reimbursement reduction strategies. To renegotiate a payer contract that protects your practice’s profits, follow these tips:

Know Your Value

To successfully renegotiate favorable contract terms, you must be well aware of your strengths—and make sure the payer is aware of them also. If you can differentiate your practice from others in areas like cost, quality, patient satisfaction, scope of services, or increased access, that puts you in a great position because you are valuable to the payer.

But you also must have the data to back up those claims. Spend some quality time with your practice’s data and organize it so that you’ll have compelling numbers to share with the payer.

Get Your Mind Right

Negotiating payer contracts can feel high-pressure, but don’t treat it like a hostage situation. Your insurer renegotiations will not be a fast-paced process, and you don’t have to make decisions on the spot. You’ll have time to review any payer offer before countering it with your own terms.

That being said, you’ll want to feel confident, professional, and prepared. Practice your negotiating skills (roleplaying is great here), listen carefully, and of course, be polite. Remember, you’re negotiating a relationship, not just a transaction.

Ask for Help

When negotiating payer contracts, you don’t have to go it alone. Consider using an attorney who specializes in this area. Payer contracts often include lots of legalese and hidden language that isn’t favorable to your practice.

And if you think legal help is too expensive, remember that in the long run failing to negotiate good rates or contract terms will be much more costly for your practice. Contracts are enforceable, so you’re liable for what’s in it (even if it’s news to you).

Follow these Simple Rules

When negotiating a private payer contract, follow these best practices:

  • Think beyond rates for additional opportunities for negotiation. If the payer won’t budge on reimbursement, try asking for favorable terms, like carve-outs, yearly escalations, the appeal process, or claims submission period.
  • Make the first move. Give the payer your requests—your ideal contract terms—before they offer new terms.
  • Don’t give in or offer a compromise unless the payer asks for it. Avoid negotiating against yourself.

Keep Your Eyes on the Prize

There are lots of moving parts when renegotiating payer contracts. If you’re not careful, you could be distracted by payers’ sneaky tactics: Renegotiating Payer Contracts.

Payers often shift money around, so it seems like you’re getting a rate boost in one area, when you’re actually losing money in other areas:

  • Increases office reimbursement, reduces drug payout: a payer may offer to increase payment for E/M visits, but decrease your drug reimbursement, which cancels out any benefit for you.
  • Tip: Take a big picture view: Look at what the insurer is paying you overall to find out if you’re really getting a good deal.

Know When to Walk Away

If an insurer can’t or won’t meet your bottom line, you can always terminate the contract. This isn’t a decision to take lightly, but you can’t just take the losses and figure you’ll make them up with volume. Carefully consider your patient base, and what you’ll be losing — and maybe even gaining — from walking away.

Of course, walking away isn’t always an option. There are valid reasons to accept a contract with poor terms—rejecting it could result in loss of patients, irreversible loss of income, or loss of a referral base.


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