Best Practices Drive Better Payer Negotiations and Increased Medical Practice Revenue

Most offices have never renegotiated their contracts and very few renegotiate them on an annual basis, missing out on additional revenue that can be substantial and greatly impact the practice’s revenue.

With your CodeToolz Contract Analyzer, your Contract Renegotiation Notices are automatically created for you, based on anniversary date – no more outdated fee schedules.

Payer Contract Renegotiation Process and Timeline

Defining Your Payer Contracting Leverage

To identify your negotiation leverage (or lack thereof) and opportunities for shared benefit, start with a SWOT analysis (strengths, weaknesses, opportunities, threats). Most physicians come to the negotiation table without a defined contract strategy.

Do you perform unique procedures or services, are you highly trained, is there a shortage in your market, etc.?
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?

Payer Contracting (Prenegotiations)

Before you begin the negotiation process, you must decide on the important issues that you want to negotiate. There are two main issues involved with any managed care contract negotiation:

Negotiation of financial terms, and
Negotiation of legal terms.

To most providers, the most important part of any contract is the fee schedule. If the fee schedule is unacceptable, the clauses and language contained in the rest of the contract is irrelevant.

Successful Payer Contracting Renegotiations

If true, emphasize the fact that there has not been an increase in years.

Negotiating or renegotiating a payer contract for your medical practice can be one of the most important steps you can make toward improving the practice’s financial health.

Successful renegotiation of your payer contracts has a usual yield of 10 percent.

Payer Contracting (In Summary)

Ensuring maximum reimbursement in a timely manner is always at the top of a healthcare provider’s mind. But we find too often that many providers are leaving money on the table with inefficient and infrequent payer contract management.

For a more in-depth look, view: Payer Contracting in An Era of Declining Physician Reimbursements and Managing Your Payer Contracts Like a Pro.

How to Make a Medical Practice More Profitable

This group practice, as with most, did not have a clear picture of this payer. Not only was the contract never renegotiated (6+ years), under-billings existed. Our focus here is the successful renegotiation.

As you can see by the Units Billed this is a large practice, nevertheless every dollar is critical, and your payer contracts and fee schedules must be managed properly, no matter the size of your practice.

The Client’s Current Rates, Receipts and Units Billed are based on Jan. – Sept. 2022. New Rates will take effect for the client 1/1/2023.

Renegotiations are not always easy; some may not garner you the 6-digit increase this client now enjoys but this is such a critical aspect of your practice, it must be done.