10 Obstacles from Payers in Contract Negotiation

November 2, 2016
Gabriel Perna

Negotiating the rate increase you want from a payer is a "war of attrition," says one expert. Here are 10 ways they'll try to trip your practice up.

Marcia L. Brauchler, of the Littleton, Colo.-based healthcare consulting firm, Physicians Ally, isn't afraid to speak candidly about payers.

"[Payers] care about keeping money. All this stuff about ‘Triple Aim’ and patients, I don't see that," said Brauchler, who works as an advocate for practices who are renegotiating reimbursement rates with insurers. "I see that as an excuse to not give money to the providers of care who are bearing the burden and actually taking care of sick patients."

Brauchler outlined 10 payer obstacles during contract negotiations, to attendees at this year's Medical Group Management Association (MGMA) Annual Conference, held in San Francisco. At the top of her session, "Experiences with Payor Tactics in Contract Negotiation and Management," she warned attendees that payers have no interest in giving out rate increases and practices will have to win "a war of attrition" to get one.

Here are the 10 obstacles Brauchler presented:

Obstacle 1: "You can't find me."

Brauchler said payers make it hard to find a single contact person to negotiate a rate increase. Instead, they'll pawn the practice administrator off on 800 numbers and their website. One payer even forced employees to leave a scripted voicemail that encourages practices to call the 800 number, rather than call the contact back directly.

Solution: Log an official complaint with the insurer's complaints department, forcing them to take action in 30 days. Once you do obtain names, she also suggested creating a database of contacts at a particular payer. 

Obstacle 2: "I can't hear you."

"Even if you get someone at the health plan, they're going to act like they have no idea what you are asking for or they're going to be totally worthless," said Brauchler. Many payer representatives will simply ignore the request, cancel meetings, and generally avoid the topic altogether.

Solution: Document everything. This proves to higher ups in the insurance company that you've been treated poorly and will force them to take action in your favor.

Obstacle 3: You have to beg the right way.

One excuse from payers to not give a rate increase is claiming the practice administrator "didn't ask for one the right way," Brauchler said. Even worse, they'll sometimes claim providers didn't ask altogether.

Solution: Documentation, again; keep emails, send mail certified, and transcribe voicemails. Also give them a deadline where they have to do something, such as attend a face-to-face meeting with physicians in your practice for the negotiation. "They'll usually avoid and cancel the meeting, but in doing so will give you what you want," advised Brauchler.

Obstacle 4: "I'm powerless to help you."

"I wish I could help you, but that's just the way it is," is a popular excuse from payers, according to Brauchler. They'll come up with flimsy excuses to not work with you to negotiate a rate increase. In one example, she said a payer used the Super Bowl being in town and shutting down streets as a reason they couldn't give the practice the new contract they wanted. Solution: Use Google. Brauchler said it allows you to find out information that can be used against the payer, such as how much the CEO of the insurance company makes.

Obstacle 5: Health plan speak.

Health insurance companies will use their own language to make it sound like they have a valid reason to not give your practice a fair rate increase, Brauchler said. "They'll use phrases like 'escalation list,' 'market trends,' and 'our analytics team.' They'll give you example after example of why they can't give you a rate increase, but it will include these complex-sounding terms,” which she said are often just a fancy way of saying no.

Solution: Ask questions. If the payer says the analytics team told them no, find out who is on the analytics team. Find out who is saying no and contact them, Brauchler said.

Obstacle 6: The waiting game.

The payer is going to drag it out as long as possible to try and delay the process.

Solution: "Wait it out," Brauchler said. "Don't let them distract you from your mission." She said it helps to have someone who is in your administrative office that can commiserate with you.

Obstacle 7: "We’d have to give it to everyone."

Payers will try to use everyone else against you. They'll say they'd have to give that rate increase to other practices, which Brauchler said isn't true. She also said they'll try to tell you other practices are happy with their current reimbursement rates, which also may not be true.

Solution: "It doesn't have to be equal, fend for yourself [vs. other practices]," Brauchler said.

Obstacle 8: The home-grown fee schedule.

Payers cook up a fee schedule on their own to lock practices into a rate. However, Brauchler said these fee schedules are often disadvantageous for practices since it establishes the insurance company will not be paying the full rate that Medicare pays. Moreover, the insurance company won't explain how this fee schedule was created.

Solution: "Compare the home-grown fee schedule to a known public, free fee schedule, the current year Medicare for your geographic region," Brauchler said. Use that data to confront the payer.

Obstacle 9: Gotcha!

Payers will often use "gotcha" language in contracts that allow them to renege on the negotiated rate your practice received. For example, Brauchler says one payer put language in the contract that allowed them to reduce the rate if the practice didn't send demographic information every 30 days.

Solution: Read everything in the contract and have the payer get rid of language that's not fair to the practice.

Obstacle 10: "This is our final offer."

The payer will threaten the practice by saying the offer for the rate increase they are sending is the last one. Brauchler said this is rarely the case and sometimes they'll use that multiple times in the same day.

Solution: Disregard it.