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Negotiating with Payers as a Small Practice

Negotiating with Payers as a Small Practice

A colleague of mine is leaving a group practice and going out on his own. He asked me recently how to find the fee schedule for a certain insurance company and I said, "You can't."

He was apparently told that this information is public. He was misinformed.

Except for Medicare, it can't possibly be public. Insurance companies have different pay rates for different physicians, even for physicians in the same town in the same specialty. Sometimes, they even pay physicians in the same practice differently.

Even though the contract says that there's an attached fee schedule, there never seems to be. So unlike any other contract between two parties, physicians sign blindly. I mean, especially if you're solo, what choice do you have anyway? You have no negotiating power. You take what they give you and you find out how much that is along the way.

Now, if you're part of a bigger group, that's a different story. An established practice already knows a payer's reimbursement rates. Ultimately, there are power in numbers.

So what's a small practice to do? In the beginning, maybe nothing. But with time, you figure out which company pays how much for what service.

From there, you try to negotiate better rates with the poor performers. Depending on your specialty and the demand for your expertise, payers may be willing to negotiate. And failing that? Well, be prepared to walk away.

Will you lose some patients if that happens? Probably. But that opens up your schedule to patients whose plans value your services more. Continuing to see patients who have plans who pay you poorly does you a disservice. 

It costs you the same to see someone whose plan pays half of Medicare rates as it does to see someone whose plan pays 110 percent of Medicare rates.  And until patients demand a better plan from their benefits manager, the insurance company will have no incentive to try to provide more for their clients. 

 

 
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