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6 Tips to Negotiate the Payer Contract You Want

Previously published August 2016.

Payer contract negotiations don’t have to be painful. Consider these action items to help keep you focused, avoid payer pressures, and prioritize your organizational goals to ensure the right outcomes for your practice:

  1. Basic housekeeping: Getting your ducks in a row before the process begins is essential to your success. One key item is to ensure you get the entire proposed contract, including all reference documents, attachments, exhibits, etc. This is the only way for you to know exactly what your carrier is asking you to agree to. Also, establishing a contract review team and setting a review timeline can really make a difference. Finally, be sure to examine the payers past performance with your organization. 
  2. Create a “Bottom line” list of objectives and priorities. This list, which might include timely payment, specific treatment options, etc., should inform your strategy for working with the payer. Although the payer often will submit a standard contract, don’t assume you have to accept it wholesale. Your list will help you know where to focus your negotiating efforts.
  3. Pin down language: When reviewing the contract, look for ways to clarify language and increase understanding of its requirements, removing as much ambiguity as possible. Look for conditions that could affect specific situations within your practice, such as prevalent patient populations, common disease processes, and provider specialties, among others. The more clearly you can define your responsibilities and those of the payer, the more successful the contract can be.
  4. Sell yourself: Make the payer aware of your practice’s strengths and abilities. That includes the fact that you can deliver cost-effective quality services promptly and reliably to access targeted populations and monitor and control utilization costs and quality assurance. This will help establish your organization as a desirable partner in the contract.
  5. Identify the downsides: Perform a risk-benefit analysis. Determine if there are any safeguards within the contract to prevent past issues or challenges from happening again. For example, if the payer has a history of not paying on time, ensure that the contract clearly states when interest rates will take effect for unpaid claims.
  6. Know when to walk away: You should have a clear understanding of the contract’s importance to your practice, including how it helps to meet your organization’s goals and objectives. And if your group doesn’t trust the payer or if the contract isn’t a good match, then it may be time to walk away. Use your list of bottom line objectives and priorities as your benchmark for this decision. In particular, be very wary if the contract causes you to take responsibility for matters outside your control or includes provisions that don’t pass legal muster.

Although you may not be able to implement every tip above, keeping them in mind should make your next contract negotiation a smoother, less stressful event.

Take Aways:

  • Choose the right people for your contract review team.
  • Know your bottom line objectives and priorities for the contract.
  • Use your practice’s strengths and abilities as bargaining chips.
  • Recognize when to walk away.

To learn more about effective contract negotiating tactics, check out the following Coding Leader training: