How to Negotiate Contracts With Health Plans

If you are a health care provider, successfully negotiating your payer contracts is one of the most important things you can do to protect your revenue. This challenging, time-consuming task deserves your special attention.

Instructions

Contract Negotiation

• 1

  You may have heard the adage, "Garbage in, garbage out." This applies directly to the quality of your data. To negotiate a contract successfully, you need to know the price you are to be paid for each service. If you are renewing a contract, you need to know whether the health plan has paid you accurately -- or at all -- according to your current contract. Accurate data is a strong bargaining tool to use with a payer at negotiating time. If you have not been paid accurately, be sure to inform the payer and let it know that you are less likely to contract with the payer again. If you are considering contracting with a new payer, do your data due diligence. Ask your colleagues about their experience and check with your professional societies. Visit the payer's website and look at its utilization policies to determine what the payer covers. Do its allowances compare to other payers with which you are currently contracted? Will it pay for new services you are providing? Having accurate data about your practice and patient demographics will help you know if the payer is a good match for you.

• 2

  In addition to good data, you need goals. Take time to carefully read the contract the health plan is offering. You are both in business to make money. Look for 24/7 access to the payer's fee schedule, interest payments on uncontested claims that are held up for more than 30 days and financial incentives that reward exemplary performance. Seek the ability to negotiate the fees for the services that are germane to your practice. If you are a specialist, you have a better chance to increase your reimbursement if the plan does not have other competing providers in your area. Be sure to research this before you sit down at the negotiating table. Ask for advance, written notice of any changes to plan policies and procedures. This will be less costly for your office should you have to change your practice. Finally, seek online access to patient benefit information, eligibility and claims process tracking. All of these options help reduce your office costs. Remember, this should be a contract between equal partners.

• 3

  Your clinical education most likely did not include the fine points of contract negotiations. While health plans and hospitals have experienced accountants, lawyers and contract experts on staff, you are attempting to do the same yourself. This may not be the best way to spend your time and resources. If you need help working on contract details that seem cumbersome, have ambiguous definitions, unclear fee schedules, odd coding or billing requirements or seek to amend the agreement without your approval, call in professional help. If you do not have an accountant or lawyer available to your practice, consider contacting your local medical or specialty society for recommendations. Also seek recommendations from colleagues. The money you spend on expert advice in contract negotiations can reap a healthy return on your investment and allow you to sleep at night.