Contract Renegotiation: When and Why Should You Renegotiate your Contract
Contracts with insurance providers are full of legal and financial information that can be hard for primary care physicians to understand and keep up with. Most insurance providers are hoping for this and often make contracts that are riddled with technical terms that understanding them alone takes a long time. Regardless of that, you should make an effort and spend the time required to know your plan.
Generally, you should be paid around 12 percent more with insurance contracts but the complex terminology used in the contract is designed to complicate the procedure and confuse you into signing a contract with reduced rates. When this happens, you should open up the conversation for renegotiation of your contract. And, if you are not careful enough, you may not receive the rates you should be receiving either. There are certain tips and tactics to follow to be able to renegotiate well and not just that, you should also know when to reject a contract.
Know Your Plan Well
The most important thing to do before you decide to go through the contract or if you have to check if you should be renegotiating, is to know more about the health plan being provided by the insurance providers. The importance of this step is that it allows you to know if your practice is eligible for the plan and you can see how well your practice fits the health plan. You should use the health plan website or ask them for information about other healthcare providers, whether it be primary care physicians like you or hospitals and surgery centers. Not only does this help you assess if your service belongs with the health plan but it also lets you know of your importance to the health plan.
Knowing the health plan and how many physicians are involved within a specific demographic is crucial for knowing what leverage you have when negotiating or renegotiating your plan. Information gives you the power to renegotiate and draw lines either in sand or in stone, depending on how much of a pull you may be able to have. Many physicians will study the contract at hand but won’t know much about the plan itself, meaning that they are more likely to be given reduced rates, again.
Also Read – Importance of Clinical Documentation – How it’s Impact Your Practices Revenue
Look out for Dealbreakers
If you feel that the initial contract isn’t giving you what you are worth, then it may be time for renegotiation. While you are renegotiating the terms of your contract, you should be careful of the following dealbreakers as they may look harmless enough, but are actually set purely for the benefit of the insurance provider. If these are the terms set in your initial contract, set up a meeting for renegotiation of the contract as soon as you can because you are not being treated fairly.
- Your signature is not required for the insurance provider to be able to change the terms of the contract. This is a huge no-no in any field, not just in insurance as you have no power regarding any future changes in the contract. The health plan may change significantly and you will have to abide by those changes as you gave up the right to be consulted for these changes.
- You do not have access to all applicable fee information.
- The definitions used in the contract are unclear and ambiguous as to who has access to the services.
- You aren’t allowed, as per your contract, to establish any parameters or limits when it comes to your practice. This limitation of your independence is a direct deal breaker as you will constantly require approval from your insurance providers.
- The contract has risk limits that are not manageable by you or your service. This clause is unacceptable as it sets expectations for you that cannot be met.
- Billing requirements that are not standard, meaning it adds to your workload.
- The fee schedule for appointments or services that are not covered by the plan.
- You have to go through a tedious process to get pre-authorization for the procedures.
- Filing requirements that have a time period shorter than 90 days as it adds pressure to you and your already increased workload requirements.
These are the top deal breakers that are commonly found in contracts that are solely for the benefit of the insurance provider. In general, if your contract is riddled with ambiguous terms that are hard to keep up and has terms that take away your authority over most matters, then that contract isn’t made for you. Before you sign a contract, talk to our experts at Practolytics and they can help you establish the insurance contracts in terms of business centric and profit oriented manner.
Keep in Mind Certain Tactics for Renegotiation of Contract
When renegotiating the contract, you should use these tactics to improve your chances of successfully renegotiating the contract for your own benefit.
- Be prepared with all the opportunities that can be used by you during the renegotiating. What this means is that you should have all your information ready so that you seem confident and well prepared, hence, more likely to be offered the terms you want. It is recommended you make a contract analysis sheet as that will make the process easier for both parties. If possible, identify your optimal Medicare reimbursement percentage prior to the renegotiations to make the process more direct.
- Be already aware if you want to leave or keep the contract. Renegotiation doesn’t always mean what you want to know, if you want to make these new terms a line in sand or stone. Have a clear idea of what you will do if the renegotiation doesn’t go your way, as it will influence your negotiation skills.
- Clearly define escalations and other steps that you are legally allowed to take if the health plan does not stick to their end of the agreement or does not follow through with discussed changes. Because if these are not clearly mentioned but are rather implied, even after the renegotiations are accepted, there is no guarantee of physical follow-though by the other side.
Also Read – Key Things To Consider While Negotiating Medical Insurance Contracts