Payer contracts represent a significant amount of physician revenue and should be evaluated with careful scrutiny. Physicians who fail to negotiate with payers or gain a clear understanding of insurance contracts risk presenting a financial blow to their medical practice.
Negotiations with insurance providers aren’t difficult, but they do require time commitment and effort on your part.
What is your payer-provider relationship status? How often are you updating the often are you updating the payer on top services administered in your practice? If you’re spinning your wheels about how to successfully negotiate with payers for your medical practice — here are a few starting points to consider.
Analyze Insurance Contracts
Make it a priority to examine the terms and expiration dates of insurance contracts. Most plans automatically renew unless you request changes.
Review the contract to determine how much notice is needed to make rate adjustments before the expiration date. MGMA (Medical Group Management Association) recommends requesting a 2 to 3 % increase in rates annually instead of a 10% increase at once for instance.
For paperwork involving reimbursements, rates, or term modifications, appoint an in-house administrator to handle contracts or hire an attorney to review terms before signing payer documents.
Collect and Provide Accurate Data
Before negotiating with payers, doing some research and becoming well versed in your internal data could prove beneficial.
Your strategic planning analysis should include a review of your practice’s strengths, weaknesses, opportunities, and threats — also referred to as SWOT analysis.
The Journal of Oncology Practice states you should present data about utilization, revenue, and expenses of your practice — measures of quality are most effective. Each year, physicians should provide payers with a list of services most frequently administered in their practice. The payer will then provide a fee schedule for relevant services which makes negotiations more organized and easier to address.
Gain a Clear Understanding of Legal Documents
As stated above, before signing the dotted line on any payer paperwork, be clear on the terms — if necessary, hire a professional set of eyes to review the documents for you. Legal wording can be confusing, but the cost of not understanding contracts could hurt your business in the worst way over time.
Deceptive practices carried out by some insurance providers trick unsuspecting physicians into establishing an agreement or modifying contracts. To be safe, train staff in your practice to be cautious of paperwork their signing off on and to forward payer paperwork to proper personnel when necessary.
Know Your Market Share
Are you the only physician in your area to offer the services you provide? Do your patients give positive feedback when visiting your practice? If you answered yes to either of those questions, you may have enough leverage to increase your chances of having successful insurance contract negotiations.
If you’re a small or new practice, consider surveying your patients after each visit to measure clinical performance and patient satisfaction. Sharing impressive market data may convince payers to meet the terms of your negotiation quicker.
By implementing the negotiation strategies mentioned here, you could improve your payer-physician relationship, promote patient satisfaction, and boost revenue for your practice— on your terms.