Are you one of the many physicians who sign contracts with payers without negotiating? While you aren’t alone in doing so, know that you might be making a mistake.
All healthcare contracts are quite complex legal documents that need to be understood and reviewed before you sign them. Furthermore, negotiating with the payer can help you get a better deal.
Confused about how to do so? Again, you are not alone. It is common for physicians to seek answers about how to better negotiate with payers. We can’t give you an answer that would work each time. Understand each payer might be different, so how much they are willing to budge is subjective. Moreover, different specialty and practices mean that there are different points you should focus on in each case.
One thing is for certain – negotiating with payers is not an easy task. It all begins with having a strong case to begin with. If you go to them with a weak case, know that your negotiating power would be low. However, if you are well-prepared, you might be able to get a good deal.
Hence, you need to be well prepared for it. Here are some of the strategies that might help you out.
Research Is Key
You must know everything you can about the payer. This will allow you to better satisfy any concerns they might tell you about. For example, if a payer is interested in keeping the rates of hospitalization low, you must know this beforehand so that you can provide them with all data that supports your claim that your practice can deliver low rates.
Know How Low You Can Go
It is important to know what your lowest acceptable amount is. By knowing so, you know when to back out of the deal and when to push. For this, you must analyze your service costs and fee schedules. Determine your breakeven point or the value at which your cost equals your revenues. Any amount that covers the breakeven point is the lowest amount you should be willing to accept, though you should aim for higher.
Showcase Your Worth
One way to get a good deal is to showcase your value in front of the payer. This helps increase credibility. If you have undertaken any quality control initiatives or are accredited by a clinical organization, make sure to let them know. Don’t just say it; prove it by showing them supporting data. Convince them that you deliver quality at low cost. If you treat a demographic that is usually ignored by other practices in the area (for example, the LGBT community), do point it out.
Make A Counteroffer
Just because the payer isn’t budging on the pay rates doesn’t mean all is lost. You can still push for other valuable things. This may include:
a) Allowing a given period for appealing a denied claim
b) Deciding the period for submitting claims.
c)Changes to the cancellation clause and what type of advance notice would be required.
d) Negotiating the time for payments and what interest would be charged for late payments.
At the end of the negotiation, if you feel that nothing went in your favor, now is the time to decide. Is the contract financially feasible for you to sign? Can you afford to lose the patients that come under the plan given by the payer? How you choose to answer these questions will decide whether you should sign the contract or not.
Do your homework, tell your demands and see if things work out.