9 points to consider when negotiating with payers

August 25, 2013

Whether you are a novice or a seasoned negotiator, payer contracts can be complicated and difficult to interpret, even with an attorney or consultant by your side.

Whether you are a novice or a seasoned negotiator, payer contracts can be complicated and difficult to interpret, even with an attorney or consultant by your side. Nancy Brown, chief financial officer and partner at Think Big Health Care Solutions, has a list of nine points to always keep in mind during debates with payers.

    1.    It’s business, not personal. Many practitioners take the process personally (and why not, it is their livelihood), but the truth is it is a part of doing business.

    2.    Know the rules of engagement. Who is going to be accessing you through the contract? Self-insured plans? Fully-insured plans? Is this a leased network? Each will have its own “rules of engagement” that you need to be aware of.

   3.    What your practice can and can’t live without. You’re not going to get everything you want – a negotiation is just that – and in the end you WILL have to compromise on some points.

    4.    Are you willing to walk away? Know before you go in which procedures or terms that, if not met, will cause you to walk away from the table. Know which ones you are going to use as concessions to get what you really want.

    5.    Read everything. Read the contract very carefully for terms and clauses that are one-sided such as amendment provisions, definition of medical necessity, rate changes, timely filing provisions, prevailing contract, and termination.

    6.    State laws apply. Be aware of your state laws and how they affect the way insurers do business. For example, be aware of timely-payment rules and take-back rules.

    7.    Be aware of the contract term. Many payers want to sign providers to long-term (3 or more years) contracts. Does your contract have built in increases to keep pace with inflation or other considerations?

    8.    Make sure rates are clear. If the rates are based on a proprietary fee schedule, you need to know what they are before signing. If the rates are based on Medicare, is it current/prevailing or another year? If current/prevailing, what will you do if the rates drop significantly? Are there multiple plans under this payer and do you have the fee schedules for all of them?

    9.    Know what isn’t covered. Be clear on what the contract is NOT covering, i.e. what procedure codes are not covered, procedures with very low reimbursements, or require you to use a specific outside vendor.