What you want and why. When you were a kid and you asked mom for something you wanted, which got you more respect: Clearly outlining the benefits and costs of keeping the nifty turtle you just found in the back yard, or sputtering a pouty “’Cause I wanna turtle!”? Likewise for dealing with payers. What goals have you set for the following year? Five years? What will they cost? Why are they worthwhile to pursue? “This will go much farther than, ‘Hey, can you pay me more?’ They’ll say no,” says Breeze. “The next step is ‘Well, here’s why.’ By that you’ve set yourself apart from most other physicians. I’m not going to pretend that every carrier is just going to fall over when you present your numbers. But they’ll take you more seriously.”

Know how to walk away. This idea can knot up the most placid physician tummy. “It’s very, very hard to walk away,” says Mertz, especially if it means your waiting room will become 20 percent emptier.

But Madden maintains that it could be a step worth taking. “You never lose all of your patients when you drop a plan,” she says. Of course, you want to terminate in the right way. Send a letter to both the insurance company (and the potentially affected patients) that in 12 months you’ll terminate if they won’t raise your rates. Cobuzzi recommends including a sentence like “Your fee schedule is inconsistent with my cost structure.”

“If enough physicians start dropping their [contracts] and the panels for these payers get small enough, even if the small doctors drop them — and it may take a year or two or three — the insurance companies will come knocking at the door and say ‘What can we do?’ because they won’t have any physicians to work with,” she says.

Your most important to-do list

There are a number of proactive tasks you should consider doing to put (and keep) yourself in the best possible bargaining position when it comes to negotiating with payers. Consider these suggestions:

Follow up annually. The squeaky doc gets the grease — on your palm, that is. “Squeezing a couple percent out of a payer every year sometimes works better than asking for 10 to 15 percent every five years,” says Milburn. Alternatively, he suggests, you could agree on a two-year contract with a 2 percent escalation factor. And don’t be afraid to be a pest. “Physicians should insist on receiving a complete fee schedule and coding guidelines from a carrier before signing,” says Breeze. No, the carrier will not want to do this, but be persistent.

Read each contract carefully. This cannot be stressed enough. They are not all the same. Look for red flags such as the aforementioned “evergreen clauses,” meaning automatic renewal, or “market fee schedule” — an insidious reimbursement-sapper. A market fee schedule can be whatever a payer wants it to be, says Breeze. “They may say they’ll pay you 105 percent of their ‘market fee schedule.’ That’s great, but the next year, the market fee schedule can be anything.” What if it’s 10 percent lower than this year? “You just got a haircut you didn’t want on your charges,” she says.

Insist on including a clause requiring the insurance company to give you written notification of changes. “Not by fax. Not by e-mail. Not by any electronic means,” warns Breeze. “‘Electronic’ means to them that they can tell physicians about a fee schedule change, and it doesn’t have to be in a very obvious place.”

If at all possible, engage an attorney to read through the contracts. Yes, this can be pricey, and maybe infeasible for a small operation. But the investment might be well worth skimping elsewhere.



Tighten your operations. Consider that a faucet dripping once per second can fill your bathtub 55 times in one year. Yikes. Look around for such “leaks” in your practice. How’s your scheduling? Lots of no-shows? Perhaps an appointment reminder service is in order. Do you use your EMR and practice management software to their fullest capabilities? Try to understand “where you fall in terms of your colleagues,” says Breeze. “If you prescribe more expensive prescriptions, maybe you can explore a different formulary. It’s not only the insurance companies who need to save money.”

Look at every operational aspect of your practice, especially your staff. “Getting paid fairly is important and you should do everything in your power to do so, but there is also pressure on you to make sure you don’t have employees who aren’t working the way they should,” says Breeze.

Code and bill properly. This is undoubtedly one of the most challenging aspects of the whole process of payment by insurance companies. “Even when a practice has a good coder, it’s difficult,” says Cobuzzi. “It’s not an exact science.”

Cobuzzi also points out that billers are not necessarily coders, or vice versa. Billers may not be certified in coding. This is a concern, she says, because such billers could have critical gaps in their knowledge. Worse, they may not be unaware of current protocols, which morph regularly. “A practice has ‘Darla,’ and she’s ‘wonderful,’” she says. “But Darla’s been doing the same thing for 15 years.”