The Rapidly Changing World of Practice Management: Negotiating Payer Contracts
Properly managing the payer contracts while also maintaining healthy relationship with them is an arduous process for practices. This might take them back seat, especially when it comes to daily practice activities. And for this very reason, most of the healthcare practices fail to renegotiate their contracts or only renegotiate in a yearly basis during contract renewal.
Managing a practice is no walk in the park and when revenue pressure surfaces, many physicians face difficulty. Among the most crucial business decisions a practitioner can make to maintain a significant effect on a practice’s profitability is to negotiate a managed care contract.
Practolytics aided contract negotiation will allow practices to strategically manage their contracts and negotiate purposefully. We allocate physicians with service rates and competitive terms that were mostly available to large networks.
Summary of contract negotiation strategy:
Table of Contents
Payment Analysis and Fee Schedule
- Maintain a single point of access for all the contracts, so that it becomes easy to organize, monitor, manage, and evaluate the fee schedules by the payer.
- Get claim data downloads for the previous 12 months, then look over the claim information to find the top payers and the agreements that will have the biggest impact.
- Identify the revenue impact that would be made by the given reimbursement rate, combined with CPT codes for your payers.
- Carry out market analysis for reimbursement rates for various payers and business models across practices for contracts.
- Compare the relevancy of your payments frequently, as well as your charges’ sufficiency, payer offers, competing offers, and many more.
Reimbursement analysis and fee schedule is a very crucial aspect in the contract negotiation process as it gives out the understanding required to create a clear renegotiation plan. The fee schedule can then be compared with Medicare’s existing year set of goals and what can be expected out of the renegotiation.
Approach to Contract Negotiation with Payers
Practitioners must possess relevant technology and advanced tools to carry out contract negotiation services with effective strategies.
Most times, practitioners fail to negotiate with the payers as they already have enough on their plate. With patient care being their innate priority, negotiation is not their area of expertise. So it is always best for them to choose a third party to assist them to negotiate effectively.
The third party should have an eye on both the sides of the contract to have great insight on what the payer expects out of provider contracts. Practice must have recommendations to make appropriate contracting process on payer penetration, market and data analysis.
Having a professional team to assist and create personalized provider contracting strategy for each client with unique needs and objectives is imperative. This way it becomes easy to access contracts and identify points that need enhancements.
Once the renegotiation process gets toward the end, the third party would recommend a portion of Medicare that needs to be charged (generally 150-200%). Although it is uncommon, certain contracts will pay a percentage of the costs that are invoiced, therefore it is crucial to set your rates at an appropriate amount to maximize revenue.
Even while contract negotiations take time, the results are frequently highly satisfying.
Complete Contract Maintenance and Monitoring
It comes without saying that even after conducting contract negotiation and renegotiation, maintaining and monitoring of these contracts are indisputable. Having the accurate tool to do that will take a load off the staff at large as the manual effort is significantly reduced.
A contract analyzing tool will help identify contracts that are up for renewal and allocate space to review the contracts thoroughly and help to increase reimbursements by accurately identifying opportunities for renegotiations.
As the business environment changes, practitioners can increase their payment potential by tracking contract negotiation cycles and actively recognizing areas of financial focus.
Now, let us look into ways to improve negotiation by shooting for the stars.
How to Identify Top Payers and Negotiate Wisely?
Provider contracting is a crucial part of the entire healthcare system. They have a significant effect on all the healthcare processes including reimbursement charges, fee schedule, and provider credentialing. With the right set of data and information, practices can negotiate their way into payer’s contracts and bring in more revenue.
In today’s digitally rich industrial world, it has become critical for practitioners to understand managed care contracts that determine the provider-payer relationships. It is equally important for them to ensure that the contract language is mutual and gives the practice protection from ongoing process and agreement modifications.
Practitioners and medical organizations should be aware of how each payer contributes into their overall revenue mix. They should keep a close eye to the contracts that comprise the majority of their revenue as well as how their practice belongs within the payer’s geographic coverage region.
Detailed Contract Modeling
The correct tools can assist you in better managing contracts throughout your organisation, and they don’t have to be time-consuming or challenging to manage. To show an exact reimbursement image, the procedure begins with obtaining the appropriate data. Next, a powerful contract management platform that can model “what-if” situations is used.
The same technology can guarantee that contract conditions are adhered to and appropriate payment is obtained throughout the duration of the contract. Organizations may identify and monitor a data-driven strategy for better payer negotiations and optimizing your payer revenue with the use of contract modeling and analytics.
How to Negotiate Payer Contracts More Effectively: 5 Steps
- Take advantage of general communication best practices
- Make a SWOT analysis of your practice.
- Obtain Information
- Create a Payer Contact Matrix
- Create the Payer Contract Negotiation Objectives, Goals, and Strategy.
In order to have the finest payer fee schedules feasible, physicians should follow these 5 stages both before and during discussions. By doing so, they will get a critical awareness of their practices. It is crucial to understand which payers are generating the most demand and to carefully review contracts to make sure the practice is being fairly compensated. The long-term sustainability of the practices of those providers that adopt these guidelines will be enhanced by their capacity to meet the difficulties of the changing payer market.
Contract Negotiation- Best Practices
- Thorough contract evaluation is part of our payor contract analysis and price negotiation services.
- Analysis of contract language to create the best conditions for doctors
- Analysis of payer’s usage and payments to compare reimbursements
- Boosting reimbursement rates by working with payers.
- Development of a relevant charge schedule evaluation to support ideal rates.
- Market research will be used to give payers with a thorough proposition.
- In any given market, discuss joining additional payer plans.
To Sum Up:
We have outlined how to manage payer contracts successfully and negotiate a payer contract in this blog. It might not be feasible for small practices with restricted resources and time to implement everything to the extent we have recommended. We still think it’s crucial, though, for solo practitioners to follow these same five steps and make every effort to complete each one in order to place your practice in the ideal position to achieve substantial outcomes.
Practolytics is among the most competent provider contract negotiating and reimbursement companies because of our extensive roots in healthcare aspects. Once our staff is certain of the details of your payer contract, we find its strengths, shortcomings, and areas for development before going over them with you.
ALSO READ – Common RCM Mistakes and Ways to Avoid Them