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negotiating medical insurance contracts

Key Things To Consider While Negotiating Medical Insurance Contracts

Medical insurance contracts typically cover essential health benefits like hospital visits, doctor consultations, prescription drugs, medical devices, and wellness care. As beneficial it is for patients, it can be frustrating to the physician to acquire a secure contract. To land a secure and mutually favorable contract, you need to understand certain key points from the health plan and link them to your practice in order to generate revenue that can prove beneficial for the insurer, physician as well as their patients.

Gathering Information

To negotiate a secure and beneficial contract, always put in some time and effort to study the strategies of the health plan that the company plans to introduce in your community. You must review the health plan policy as well as the actual contract language. To this end, first, you need to gather data on your practice that demonstrates the quality of your practice like the number of patients you see every day, new consults, average drug prescriptions, referrals, specialized medical service, and patient satisfaction. This data is an indicator of your reputation and quality of service as well as the demand supply you can provide, which serves as leverage while negotiating contract terms.

Fee Schedule

Prior to signing a contract, you must make sure the contract includes the fee schedule with full transparency and is within the standard rate. Also, you need to ensure that you will be notified when updates are made to assess the implications the changes might cause in your practice. Using your quality of service as leverage, you can negotiate the fee schedule to your acceptable time.

Covered Services

Look into what services are included in covered services and include them in the contract. Then, define the differences that might arise when healthcare services are labeled and see if they are included in the list of the covered services. Except for hospital visits, emergency services are also to be defined by the physician. You can define it as what a layman would consider an emergency and seek medical attention to avoid retrospective payment denial.

Process Of Claiming Insurance

Review the contract and ask the insurers to state clearly the steps to claim the payment and how long does it take for a clean claim payment to be processed. Issues like membership card, properly filled claim form, the period for submitting a claim, the period for appealing a denied claim, the time for payment, the interest rate for overdue, and the cancellation clause should be clearly specified.

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Notification Provision

Ask medical insurance providers to properly notify you when any updates are made to fee schedules, filing time, and requirements as it might cause payment denial. Always ask presence and signature of both parties before any paperwork you receive regarding rates, charges, reimbursement, or network participation.

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Handling Disagreements

Specify in the contract in case of any kind of dispute where, when, and how the arbitration will be conducted. Also, review the language for indemnity and see that it is equal and mutual, and does not land you with an irresponsible health plan.

Medical Records

Assess the language which mentions the patient’s medical record requirement for insurance purposes. Make provisions for minimal medical record submission rather than the entire medical record under the requirement of the health plan so as to maintain your efficiency as it can be time-consuming and costly.

Terms And Termination

Most health plans are a multi-year contract during the initial association. With a multi-year contract, make sure to negotiate and include an accelerator clause to guarantee fee schedule increase by a certain percentage in each following year, without which it is impossible to increase your revenue.

However, it is possible to request the contract on a yearly basis by adding a provision of termination without cause in the initial contract with a 90-day prior written notice.

Always research into the reputation of the insurers and get insight from other associated parties. If you think negotiation is not going in a mutually beneficial direction, it is always best to walk away from the contract.

Financial Assessment

Apart from the fee schedules, you need to be aware of capitation. Ask about what services you provide will be considered for capitation and if the benefit plans will affect the capitation. Be sure to mention any benefits to be included if you can meet the membership threshold and expand their network. These aspects will increase your capital source. You also need to ask for any incentives you can get for quality, cost-effective medical practice.

Administrative Aspects

After insurance coverage implementation, briefing on the billing clerks, lab technicians, nurses, and physicians about the coding and billing, services covered, claiming procedures, denial appealing process must be done. From a physician’s perspective, they should also modify their practice according to the protocols specified by the insurers. It includes ensuring proper referral procedure, billing, and coding.


Keep in mind that everything in the contract is negotiable. The health plan representatives might try to deceive you and act like no negotiations are allowed. This kind of layout is set to ensure the insurance providers benefit from the contract unless you can identify and ask them specifically to change it and make it mutually beneficial. Even in such a case, you do not need to worry about the process yourself and can always seek professional legal advisors. Talk to our experts at Practolytics who can review your practice requirements thoroughly, negotiate, and setup the right set of medical insurance contracts.

As we mentioned earlier, do your homework and gather information about the health plan you are trying to negotiate with, and see how established they are. Review every language of the contract and do not hesitate to ask to change any aspect that talks about holding you responsible alone in any situation which might create problems for you in the future.

Leave all these burdens to our experts at Practolytics and we will take care of setting up the contracts in an effective and beneficial way.
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