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It’s important to remember what you bring to the table before negotiating payer contracts.
It’s commonly believed that small practices are at a disadvantage when it comes to renegotiating contracts with big payers. After all, these payers have the muscle to set the terms of the deal.
But that’s not always the case. If you’re small, you may have more leverage than you think. Here are six things you may not have thought of that can increase your pull with payers. If you have them, make sure your payers know.
You keep long hours.
For those practices that keep them, extended hours are a huge advantage, especially in primary care. “Having extended hours reduces ER visits and improves continuity of care,” says Penny Noyes, president and CEO of Health Business Navigators, a Bowling Green, Ky., firm specializing in payer negotiation and credentialing nationwide. Payers love to see quality indicators such as fewer episodes of care and better controlled care overall.
You’re the only game in town.
You may be small, but if you are the only (or one of a few) practice that serves a particular population in your area, then you have more clout with payers. An area might be well served with surgeons and cardiologists, but if you’re the only family physician in town, be sure to point that out. “Primary care is very important to payers,” says Noyes, "and few markets are saturated with primary care providers."
You offer specialized services.
“If there’s one procedure only you do, or if you have a subspecialty, say treating asthma, for example, that will carry a lot of weight with your payers,” Noyes says. Look at your practice and see if you provide a valuable service to your patient panel that they can’t easily get anywhere else.
You’ve been recognized.
Tell payers about your accomplishments. Don’t be modest if you have accreditation from a healthcare quality organization, such as the National Committee for Quality Assurance (NCQA) or the Agency for Healthcare Research and Quality (AHRQ). “Quality metrics are especially important for small practices,” says Brennan Cantrell, commercial health insurance strategist for the American Academy of Family Physicians.
You’re well loved.
If your patients love you, let your payers know. Patient testimonials and positive survey results can help, too. “The bottom line is all about money, but payers are looking for more than that. They want the lowest pricing but also happy customers,” Noyes says. Payers’ biggest customers are organizations that want their employees to be happy with their healthcare plans, including the selection of participating providers.
You can play hard ball.
This is probably the most difficult tactic to master, but it can also be the most effective. Noyes recommends you start with a friendly approach. If a contract is due at the end of the year, then get in touch by July or August and ask for the changes you desire.
They’ll probably ignore you. If they do, review the term and termination section of your agreement. Send a formal notice-most agreements require 90 to 120 days prior notice-explaining you’ve been trying to negotiate but haven’t gotten a satisfactory response. Then later, say something to the effect of “My real purpose is negotiation, but if you can’t provide the needed rate improvement, please accept this as my notice of termination” and specify the termination date, Noyes says. You have to be bold, but she reassures you aren’t likely to lose.
During negotiations, Noyes also recommends that you make the payer aware you will be sending a notice to your patients informing them that you won’t be in this network as of the specified date. This shows that you’re concerned about your patients, and it shows you mean business. “My clients have been doing this for 20 years,” Noyes says. “It works. It can be very scary, but it’s also very powerful to use that termination provision.”
Also note dates of open enrollment for a Medicare Advantage or Medicaid replacement plan. Most payers do not want to lose primary care providers around the same time that patients are choosing their healthcare plans for the coming year.
You may be small, but you’re not as weak as you think. Take these advantages to the negotiating table, and you could walk away with far more than you’d hoped for.