Boost Your Payments by 10% with Expert Contract Negotiating Strategies

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Boost Your Payments by 10% with Expert Contract Negotiating Strategies

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Contract Negotiating Strategies

It can be frustrating dealing with payers when you don’t have a track record of success, but you don’t have to accept the payer’s terms as they present them. You CAN get favorable rates. Knowing the right questions to ask and having a strategy to negotiate can lead to a healthier bottom line that your practice can sustain over time.

Here are a few strategies that have helped practices win in their payer negotiations.

Know Your Worth: Your Value Proposition

A great first step in preparing for negotiations is creating a value proposition for your practice. Payer negotiation expert Doral Jacobsen, MBA, FACMPE, MGMA, recommends beginning by asking yourself the following questions:

  • Who are you?
  • What value does your practice add to the network?
  • How can you quantify how you add value?
  • How do you stand out against the competition?
  • Where do you see yourself on the managed care contracting continuum?

Knowing the answers to these questions improves your approach to the negotiation. You should also complete a market assessment because “understanding how you are perceived [by payers] is a foundational step.”

Understand Your Key Terms

Carefully examine the primary terms of your payer contract. Many physicians who feel they’re at the mercy of the payer or don’t build in time to negotiate, sign the contract as the payer offers it. But remember, most payers do have some room to negotiate. Consider these terms:

  • Reimbursement schedule.This is the core of your contract: You need to know what the payer will pay you. Be sure that the fee schedule is clearly outlined.  Understand how it’s calculated and how often it gets updated. Beware: Never sign a contract without a reimbursement schedule.
  • Check the deadlines.There are two deadlines you need to be familiar with before you begin negotiations: The filing deadline (the time allotted to submit the claim) and the payment deadline (how long the payer has to reimburse you after receiving the claim).
    • Many small and medium-sized practices lose a substantial amount of revenue by missing payer deadlines. Be sure you review the deadline schedule carefully. There’s no rhyme or reason when it comes to filing deadlines: some payers allow up to a year for submission, while others offer only 90 days.
  • Dispute process.As you well know, you will most likely need to dispute a claim with your insurer. You need to understand how denials get resolved. A lengthy appeals process could end up costing your practice more than the payment you’re disputing. Long turnaround times also disrupt cash flow. If the dispute process is complex or convoluted, it could mean you lose money with this payer.

Find the Hidden Terms

Most payer contracts contain overlooked terms that can be harmful to your bottom line. Be sure to sniff out these potential pitfalls with the following questions:

  • Will you be penalized if you refer patients to out-of-network providers?
  • Is there an early termination fee if you opt out of your contract?
  • Do some situations allow for waiving pre-authorization requirements?
  • Do contract amendments have to be accepted by both parties?
  • What’s the process for amendment notifications?

Data to Dollar Sign$

Your value proposition arms you with the value your practice brings to the table. You need to have the data to back you up. Private practices that present data during payer negotiations tend to up their contracts by as much as 3-10%. Your facts should clearly layout the many and varied ways the payer has benefited from your office’s quality care of their patients.

Here are some critical facts to include:

  • How much business has your practice done with the payer in previous years?
  • What are your quality metrics?
  • What are your patient satisfaction scores?
  • How you compare versus similar practices in your geography and specialty?
  • What are your cost-cutting measures?
  • How successful are you at preventing costly hospital admission or readmission?

Payer Negotiation Best Practices

Once you understand your contracts and where you stand within the market evaluate your current performance to clearly see where you can improve and what you have to offer in a negotiation. “The devil is in the details,” she explains.

Implement these best practices:

  • Define practice roles and responsibilities for contracting activities with clarity
  • Analyze contract performance thoroughly and establish your practice’s baseline performance
  • Establish timelines for negotiations based on historical performance
  • Secure a provider champion to support the process
  • Understand that a well-thought-out approach pays off
  • Take emotion out of the equation
  • Create a collaborative relationship with payer partners – and understand that it won’t be perfect for anyone
  • Establish short- and long-term goals
  • Consider new approaches/measures to assist the practice in growing into value-based arrangements

Help is Available

There’s definitely a lot to consider when it’s time to renegotiate your payer contracts. You should start having conversations with payers as soon as you’ve gathered all the pertinent information. “You can carve out your own path rather than follow someone else’s rules,” Jacobsen says.

Don’t worry; you don’t have to go it alone. Payer negotiation expert, Doral Jacobsen, MBA, FACMPE, MGMA, is available to show you how to create a winning negotiation strategy for your practice. By attending her session, you’ll learn step-by-step how to create and use a successful payer contracting strategy. Doral will give you proven communication tools that help payers understand your financial increases – and get them to pay up.