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Prepare for negotiating contracts with payers


Physicians traditionally have allowed insurance companies to dictate the terms of their contracts.

The good news is that just because you may have accepted terms set by the insurance companies in the past doesn't mean you need do so in the future. What follows is a brief overview of what and how to negotiate with insurance carriers.


Another useful preparatory step is to decide on your desired outcomes, such as fee schedules and time frame for payments. Knowing your goals in advance works in everyone's best interest when it comes to negotiating a mutually satisfying agreement.


Before beginning negotiations, make certain that the person representing the insurance company is authorized to enter into contracts. Sometimes representatives say they have negotiating authority when in fact they don't.

After establishing that you're dealing with a properly authorized negotiator, the next step is deciding what to include in the contract. The following items should be part of any contract:

You can determine which insurance plans have caused the most financial difficulties by benchmarking practices according to insurance carriers, average income of the practice, and number of patient visits. The administrative overhead required to deal with a particular plan also is important in deciding whether to cancel or continue a contract.

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Jennifer N. Lee, MD, FAAFP