Negotiating with Health Plans: So You Want to Negotiate
Healio: Practice Management
Negotiation is a delicate art. It takes patience, strategy and practice to get it right. And healthcare providers are no exception when it comes to negotiating with healthcare insurers for reimbursement rates and other contract terms.
But suppose you’re not familiar with how healthcare negotiations work or what steps your practice should prepare and research before entering into a negotiation with an insurance carrier. In that case, this blog post and article will help you understand some best practices to start on the right foot.
Preparing for a healthcare negotiation is essential and can often mean the difference between securing a favorable agreement and not. By following these simple tips, you’ll be on your way to getting the best reimbursement rates possible from healthcare insurers.
Schedule reminders for all expiring contracts to allow sufficient time for negotiation.
Review explanations of benefits to ensure consistent payment in line with the contract.
Prepare to speak about market issues affecting the practice.
Know the carrier’s competitors’ offerings.
Make a note of Medicare’s fee schedule for common services and procedures performed in the practice.
Be reasonable — not excessive — with requests, and be willing to compromise.
First and foremost, healthcare providers need to be aware of the market conditions affecting their practice. For example, what services are in high demand? How is your reimbursement rate compared to other health plans? What discounts or concessions has the practice given in the past? Carriers will undoubtedly look at all these factors when negotiating a contract with a healthcare provider.
In addition, healthcare providers should know what services and procedures Medicare reimburses on its Fee Schedule. This can give you an idea of how much certain services cost from a payer perspective and help you benchmark your rates accordingly. However, it’s essential to remember that Medicare reimbursements are often lower than commercial rates, so don’t expect to receive similar reimbursement levels from private insurers.
Finally, healthcare providers must be reasonable when negotiating with healthcare insurers. Excessive demands or requests for concessions will only serve to alienate the carrier and could potentially lead to a termination of your contract.
These are just a few tips to get you started on the path of healthcare rate negotiation. For more information and best practices, please contact us today.