Payer contract negotiations get more frustrating every year. There’s the piles of paperwork, the back-and-forth, and the ultimate worry that one wrong move is going to cost your practice money.
When you begin the negotiation process, it’s important to bring everything possible to the table to increase your chances that your final contract will be favorable. One weapon to add to your arsenal that can increase the amount of money you get from payers is to discuss how payers’ requirements increase the administrative burden your practice must deal with.
Why Administrative Burden Matters Payer contract negotiations
Administrative burden, also known as the “hassle factor,” can quickly drive up your practice’s costs and, in turn, the overall cost of the care you provide.
The preauthorization process is one instance where administrative burden really comes into play.
If a payer requires preauthorization for every procedure you provide, and each of those preauths requires 30 minutes on hold, you must pay someone to sit on the phone for every preauthorization the payer requires. In cases where that payer is a popular choice among your patients, that could easily rise to the level of requiring a full-time employee just for that one payer.
When the amount a payer offers you isn’t enough to cover the service you provide plus the cost of getting preauthorization for the service, you’re losing money on every patient you serve. That’s not sustainable for your practice.
Calculating Administrative Burden
The key to discussing administrative burden as part of your payer contract negotiations is being able to quantify just how much of a financial hit you’re taking before negotiations begin. If you’re able to put a dollar amount to the increased cost of working with a particular payer, your chances of success are higher.
Go through your records and calculate just how much time you spend jumping through all the hoops put forth by a specific payer. This could be in the form of time spent on Preauthorizations, extra paperwork you’re required to submit, or anything else that’s added to your cost of doing business.
Additionally, you need to be able to clearly articulate how your practice is different and why the payer should grant your request.
There are a whole host of ways you can differentiate your practice from others in the market, including:
- Cost Savings to the Payer: Gather data from other practices in your area that provide similar services and compare the cost of care at your practice over others.
- Better Patient Outcomes: If your practice can get better results for patients, such as controlling chronic conditions, show facts and figures to prove this.
- Decreased Emergency Use: Providing care that reduces the need for emergency room visits or inpatient hospital admissions saves the payer money. Being able to point this out can give you a big leg up in your negotiations.
No matter what you choose to use to convince the payer that they should pay you more, be sure to have facts, numbers, and documents to back yourself up. The more evidence you can provide, the more seriously your claims will be taken and the more chance you have of succeeding.
Payer contract negotiations are stressful and time-consuming, but you can come out ahead if you go into the process ready to advocate for your practice. To get more proven payer negotiation strategies, check out Healthcare Training Leader’s immediately available online training, Stop Payer Contract Frustrations from Costing Your Practice Money. In this 60-minute training, Doral Jacobsen, MBA, FACMPE, walks you through the process of asking payers for more – and getting it. Access this training today!
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