As premiums rise, independent practices fight for fair reimbursement

Before you read this article, pull up your practice’s health insurance renewal for 2026. Look at the premium increase you were quoted and compare that to the increase in reimbursements you received from payers last year.

Your findings are sure to be eye-opening. First, your insurance premiums likely climbed. ACA marketplace plans, the individual policies people buy on their own, are up an estimated 26% this year.

Employer-sponsored plans overall are projected to rise 6.7%, the steepest jump in 15 years. And the small-group coverage your practice buys for your own staff has increased as much as 11% to 32% this year.

Now compare your insurance premium increase to the rate increase you won from payers last year, if you got around to doing that. For the practices that took the time to negotiate their rates, the increase is usually only 1% to 3%, and few physicians renegotiate at all in a given year.

So where does the additional payer revenue go?

During rate negotiations, insurers point to their medical loss ratio (MLR), the share of premium dollars spent on claims versus kept for overhead and profit, and cite GLP-1s and other specialty drugs as the reason premiums keep climbing. Plans must spend at least 80% of premiums on care in the individual and small-group markets and 85% in the large-group market.

The big five clear this requirement; Q4 2025 MLRs ran from 87.9% at Cigna to 94.8% at Aetna/CVS Health. Insurers can also raise payments to their own affiliated physician groups to clear MLR requirements, allowing them to capture more of the premium inflation as profit. A recent Health Affairs study found UnitedHealthcare pays Optum-owned practices about 17% more, on average, than non-Optum practices in the same region, and 61% more in markets where it holds a quarter or more of the business. While UnitedHealth disputes the methodology, we partnered with STAT News on an investigation that found the same pattern. Optum practices were paid 3% to 111% more for the same services their independent counterparts provided.

The same dynamic plays out on the Medicare Advantage (MA) side. Plans use upcoding, assigning diagnosis codes that make patients look sicker than they are, to increase what they collect from Medicare, while often paying physicians less than Medicare does. MedPAC's March 2026 report to Congress projects the government will pay MA plans $76 billion more in 2026 than traditional Medicare would have spent on the same beneficiaries, a 14% difference, and estimates coding intensity alone accounts for $22 billion of that gap. Meanwhile, a 2025 industry report found MA plans reimburse physicians 10% to 15% below original Medicare rates.

The reality: a large portion of the revenue from premium hikes (both public and private) funds payer profits, not care delivery.

So what can you do about it?

a) Give up. Sell out. This is one of the reasons you’ve watched practices around you sell, and it’s happening more than you realize. According to the AMA, there were approximately 80,000 fewer physicians in private practice in 2024 than in 2012, and among physicians whose practices were acquired, more than 70% rated the ability to negotiate higher payment rates as an important factor in the sale.

In a March 2026 survey of independent practice leaders, only 6% said they had not been approached about acquisition or consolidation in the past two years. More than a third had been approached four or more times, and 26% went into serious negotiations before deciding to stay independent.

b) Negotiate. For practices that wish to remain independent (or maximize value before a sale), negotiating better reimbursement rates is essential. Here are four steps you can take to build a solid case for rate increases:

1. Benchmark your rates against the market

Benchmarking against similar practices, not just against your own costs, tells you your realistic ceiling with a given payer. Transparency in Coverage (TiC) data is where that starts.

TiC data is notoriously complex, and capturing a robust market snapshot on your own can be time-consuming. Whether you choose to buy a 12-month subscription or pay less for a market snapshot, here’s what an accurate market analysis typically looks like:

• Pull the TiC data for your top 5 to 10 CPT codes at the market level, including your top competitors’ rates. Avoid comparing your rates to the national average; focus on MSA or state averages for the best comparison.
• Rank codes by total allowed dollars instead of by volume. You may think the best increases come from the codes you bill the most, but often the procedure you bill 500 times at $150 matters less than the five procedures you bill at $18,000 each.
• Capture the actual allowed amount from your own reimbursement data. This can get messy across products and regions, so consulting with an expert may help to sort it out.
• Make sure you’re comparing apples to apples by digging deep into the fee schedules. Payers often have multiple fee schedules, and a single code can carry several “ghost” rates that exist on paper but rarely get paid. Anchor your comparison to the rates that are actually paid out.

2. Build your value proposition

A strong value proposition is what turns a benchmark into an increase. The case has to be concrete: better outcomes than the alternative, lower total cost of care, or a location where care costs less to deliver. An ambulatory surgery center, for example, can show a payer the exact increase they would pay if a procedure shifts to a hospital. That kind of data is exactly what belongs in a value proposition.

Spend time throughout the year tracking outcomes data, running cost comparisons, analyzing patient volume trends, anything that quantifies what happens if you’re not in-network. Build that case early, and you’ll be ready when it’s time to negotiate.

3. Find your contract’s real negotiation window and act on it

Only 58% of medical groups review their contracts annually, and 17% never regularly review them. Most practices think the time to start prepping for contract renegotiations is once the current contract expires, but your contract may specify a narrow window.

How do you determine if you’re eligible for renegotiation? Start with your current contracts and fee schedules. If you don’t have them, you can request them from each payer. Identify the initial terms and the clauses that dictate what happens after your contract ends. Some become month-to-month, others go into successive one-year terms with strict notice and termination windows. These clauses determine your timeline.

4. Audit the contract beyond the headline rate

When a contract is secured, it’s easy to assume the headline rate is a win, but the true win is buried deeper. The headline rate is the number you negotiated; the effective rate is what actually gets paid, and it’s shaped by product coverage, locations, timeframes, and the clauses that let payers change or exit deals.

Ask for the full agreement and every amendment before signing, not just the rate sheet. Read it clause by clause and mark each one as accept, negotiate, or dealbreaker.

Start with the clauses most likely to erode your headline rate:

• Products: Check what’s covered, and whether you are pushed into products carrying sub-Medicare rates you can’t sustain.
• Locations and entities: Confirm every site and provider is credentialed.
• Effective date: Note how far into the future it is pushed.
• Initial term and automatic renewal: Check whether it auto-renews, and on what terms. One-year with evergreen autorenewal is usually better than a multi-year with no built-in inflationary increases.
• Termination without cause: Check whether the payer can drop you without cause once it has enough providers for network adequacy.
• Unilateral amendment: Check whether the payer can change terms without your consent. This does the most damage when it is paired with a strict termination window. A payer can send an amendment after your window closes, and you are locked in for another year with little recourse.

Once you’ve worked through that checklist, reconcile what you’re actually paid against what you negotiated. Compare your benchmarking data against what lands in your remittances, and run claim-level reconciliation against the contracted fee schedule, code by code, to catch misloaded rates while they’re still correctable. Contract load delays are common and will persist until you call it out.

Take a recent example from one of our clients at Tribunus Health. Three months after the ink was dry on their renegotiations, we discovered that the payer had loaded their Dallas-based MDs to the Houston fee schedule for one high-value code. This was a six-figure contract load error that could have cost our clients even more had it been missed. So plan to reconcile once the new rates take effect and then on a set cadence thereafter.

When premiums rise, so, too, should your reimbursement rates. Whether you handle negotiations in-house or bring in a contracting firm, the work pays for itself. Don’t leave money on the table.

Kevin Isaacs is president and founder of Tribunus Health, a firm that helps independent physician practices negotiate stronger rates with payers to increase access to care and preserve the value of the provider.