Participating in a managed care contract negotiation cycle can often help your practice create more favorable terms and allow you to increase reimbursement and decrease administrative burden. While it may be a stressful time, it’s also an opportunity to improve unfavorable contract terms that you’ve dealt with for too long. What’s important is to take your time, not race through it, and avoid some of the most common pitfalls.
Check these three common mistakes that practices make during contract negotiation periods so you can avoid them.
1. Focusing Only on Rates
While it’s extremely important to settle on a contract with good rates, that shouldn’t be the only focus of your contract negotiation. You should also ask for other terms that might help you benefit from your contracts, such as a more beneficial covered service list, a longer claims submission period, a simpler appeal process, fewer carve-outs, a simpler fee schedule evaluation process and more.
Taking a look at the entire big picture rather than only reviewing rates can help you see what the overall impact of your new contract may look like, and will give you stronger negotiating power when you get to the table with your payers.
2. Accepting Unclear Contract Terms
Payers go out of their way to include caveats in their contract terms, but you may not even notice it — and that’s what they’re counting on. They won’t typically come out and say things like, “We will change rates mid-year.” Instead, they will use vague wording like, “Rates may change outside of these contract terms as may be deemed necessary.” And then they won’t qualify that statement by explaining what would make such changes “necessary.”
If you see unclear or vague terms in your next contract, ask for those phrases to be updated or removed. Any updates should make clear what the caveats are, using specific, detailed language.
3. Not Asking for Help
No one expects you to be a practice management expert AND a contract negotiation expert, so don’t feel like you must handle payer contract negotiations on your own. Consider working with a qualified healthcare attorney who can identify legal language that might lead to a problematic managed care contract.
While some practices shy away from working with lawyers because they don’t want to pay for the cost, keep in mind that if you sign a managed care contract with unfavorable terms, it could cost you a lot more in the long run.
Ready for your next round of payer contract negotiations? Let expert Doral Jacobsen MBA, FACMPE, help during her latest online training, Negotiate Higher Rates from Payer Managed Care Contracts. Sign up today!
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