5 tips to negotiate favorable payer contracts
Negotiating with payers is not easy, but a challenge worth taking on
Commercial payers don’t automatically reward physicians for being loyal members of their networks. Physicians need to ask for higher payment rates, said Marcia Brauchler, MPH, CPC, president and founder of Physicians’ Ally Inc., a healthcare consulting company in Littleton, Colo.
Brauchler provided these five tips to help practices negotiate more favorable commercial payer contracts:
1. Focus on payers that consistently pay below the Medicare fee schedule amount
Have some commercial payment rates remained the same over time even despite increases in the Medicare fee schedule? If so, this could be leverage for negotiating higher payment rates.
“Letting contracts live in perpetuity without negotiating year over year ends up costing your practice,” said Brauchler.
2. Create a value proposition
Has your practice opened an additional office location, and are seeing more patients because of it? Are you reporting favorable quality data? If so, ask for more money.
Other items for consideration:
• the volume of patients seen annually (especially if volumes have increased over time)
• your practice location (especially if the practice is located near a large insured group such as a school)
• extended hours or weekend clinics
3. At a minimum, ask for a cost-of-living increase
If you can show that your medical malpractice premium went up, for example, you may be able to negotiate a higher rate.
Don’t stop there, though. Look at your rent, staff health insurance, and staff salaries. Over time, have they gone up as well?
4. Don’t forget ancillary services
This includes labs, x-rays, and HCPCS codes (durable medical equipment, supplies, and injectables).
“If you haven’t negotiated the value of your labs, you’re probably paid at the default 42 percent of Medicare by most of your payers. It’s pretty easy to get payers to agree that having a lab done at the time of service is worth at least 100 percent of Medicare,” Brauchler said.
5. Involve your coders
Coders possess code-level expertise and can easily identify common payer-specific barriers to getting paid so you can solve these problems proactively through your contract.
For example, does the payer refuse to pay an unlisted code? If so, advocate for payment when negotiating your contract-and ask the payer to put it in writing.