Do your homework
Before I notified a payer that I wanted to renegotiate, I gathered meaningful data, including how much they were paying us as a percentage of our charges and how that compared to our other commercial payers. Sharing this data with them gave me powerful ammunition, and the confidence to call their bluff.
Tell them what makes your practice special
To a giant commercial insurer, your small practice is just one of many they contract with. They are not going to know what makes you special—and why they should pay you more—unless you show them.
I told this payer about their sponsored quality initiatives in which we participate. I emphasized the specific recognitions we had received for quality care from their organization and the fact that we are the only family practice in a 15-mile radius that is an in-network provider for their product.
In addition, I took what may have been perceived as negotiating weaknesses—our size and location—and tried to turn them into advantages. I pointed out that small, rural practices like mine are important to employers outside of major metropolitan areas, and these employers often have strong loyalty to their community and local physician practices. Treating my clinic well creates a favorable impression among those employers and increases business for the payer.
Don’t be afraid to ask for what you need, or want
In my experience, most physicians are willing just to “go with the flow.” They want their professional relationships to be simple and non-confrontational. So when a payer presents them with a contract and tells them nothing in it is negotiable, they sign. This is a big mistake.
I recall a talk from a contract lawyer during the practice management part of my residency. He said there’s no such thing as a non-negotiable contract. You can always do an addendum or rider. It never hurts to ask. The worst they can say is no.
Be open to trade-offs
A payer may not be able to negotiate some items due to corporate policy or regulatory restrictions, but they might be able to make a change in another part of the contract that will make up for it. A negotiated agreement is seldom going to end up exactly the way you want it to. The trick is to know when it’s good enough, and how much the time spent in additional negotiation is worth to you.
Have a backup plan
Negotiating major payer contracts can be very anxiety-provoking. At times, I have felt that if I lost a contract my entire practice could fail. But there is nearly always an alternative, and if you haven’t discovered what it is, then you shouldn’t be negotiating yet.
It’s just business
I’m not friends with the provider network person I negotiated with, but our relationship was cordial and business-like. Negotiating shouldn’t be emotional, but removing emotion from the process takes practice.
Melissa Lucarelli, MD, is a family physician, medical director and owner of Randolph Community Clinic, a rural primary care clinic in South Central Wisconsin. She is a member of the Medical Economics Editorial Advisory Board.