Managed Care Contract Negotiation Considerations (Strategy)
  • What separates you from your competition?
  • What do you do clinically better than your competitors?
  • What benefits do you bring to the hospitals you cover?
  • What are benefits to the patients you treat; in your opinion, what is the level of patient satisfaction?
  • What do you do clinically that reduces healthcare costs for the payer?
  • What about you makes you “special” within the payer’s provider network?
Steps for Managed Care Contract Negotiation/Renegotiation
  • Obtain payer representative information.
  • Obtain copy of payer’s existing contract.
  • Obtain payer’s existing reimbursement schedule for the related contract.
  • Develop contracting strategy.
  • Decide most favorable way to initially contact the payer (i.e. letter, meeting, telephone, email).
  • Contact payer and make contract proposal. (Requesting a Fee Schedule Increase)
  • Maintain strict follow-up schedule.
  • Obtain payer’s response to the proposal.
  • Review and analyze payer’s response and decide whether to accept or counter-propose.
Acceptance
  • If decision is made to accept, submit to physician for review and acceptance.
  • If physician accepts, notify payer and document.
  • Obtain written contract and execute.
  • Make sure future reimbursement agrees with new contracted rates.
Counter Proposal
  • If decision is to counter-propose, adjust counter-proposal appropriately. Submit to payer.
  • Maintain strict follow-up schedule.
  • If necessary, communicate with payer contact’s superiors.
  • Obtain payer’s final response to counter-proposal.
  • Review and analyze payer’s response and decide whether to accept or reject.
  • If physician accepts, notify payer and document.
  • Obtain written contract change and execute.
  • Make sure future reimbursement agrees with new contracted rates.
Rejection
  • If physician rejects, decide whether to terminate payer contract.
  • Analyze potential financial impact because of termination.
  • If physician decides not to terminate, negotiation ends.
  • Re-contact payer and determine if they are willing to reconsider their position.
  • If physician decides to terminate, submit termination notice to payer and payer’s patients.