You Can Restructure Payer Contracts To Increase Revenue

For many physicians, it’s easy to get caught in the mindset that there’s nothing you can do to increase revenue from payer contracting. However, it is more than possible for practices to restructure payer contracts and achieve a higher fee schedule.


Most practices are making up for a substantial decrease in revenue that resulted from a significant reduction in post-COVID patient visits. Recovering these losses in healthcare’s current environment can be challenging, especially with so many practices reporting lower than normal new patient volumes.

Favorable fee schedule adjustments have an immediate impact on your practice’s bottom line. Since there are no variable or fixed costs associated with fee adjustments, all improved revenues add to your profit margin, without major process improvements.


Physician practice managers have frequently shied away from payer contract analysis and optimization due to the complexities within their numerous payer contracts.

Adding to the revenue pressures, is the new (H.R. 3630 | No Surprises Act), Effective Date (1/1/2022). This bill expands restrictions on charging health care plan holders out-of-network rates for certain services. Providers will need to implement procedures and systems (analysis) to track payer payment negotiations/efforts in order to preserve arbitration rights. The establishment of a reliable system/analysis is essential to receiving fair payment for services rendered and not leaving money on the table.


Payer contract optimization is a valuable strategy for increasing revenue and one that can expedite post-COVID financial recovery. Knowledge, a proactive approach and detailed data-driven analysis are all imperative for success.

A solid payer contracting process should adhere to best practices across contract optimization’s three main phases; reviewing current contracts, identifying potential opportunities and renegotiating with payers, to help maximize revenue.

At CodeToolz, we like to keep it simple and say; (1) know what you have, (2) know what you want, and (3) know how to get what you want.

1. Know What You Have (Gathering Essential Data)

An important first step is gathering all documents related to payer contracts and creating a centralized system. This gives you access to essential data and helps keep payer-related information at the ready. Then analysis can begin, beginning with every source of payer revenue. Critical data points include each payer’s fee schedule and requirements for timely reimbursement, as well as the contract’s notice period for renegotiation and termination.

2. Know What You Want (Revenue Analysis)

This data can help clarify which contracts represent the greatest percentage of revenue and where your practice has potential opportunities for optimization.

Analytics allows healthcare providers to understand the true value of their payer contracts. This revenue analysis allows you to determine what various reimbursement rates will do to your bottom line, in aggregate and by CPT® code for all your payers.

3. Know How To Get What You Want (Building Your Negotiation Plan)

Increasing revenue from private payers requires a persuasive rationale, contract performance and data are your building blocks. With this data (knowledge) you can analyze payer performance, prioritizing your practice’s most frequently billed services and the correlating reimbursements.

Data about your practice is essential in payer negotiations; To identify your negotiation leverage (or lack thereof) and opportunities for shared benefit, start with a SWOT analysis (strengths, weaknesses, opportunities, threats). 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?

With the current economy, insurance companies are tightening up, so it is very important that you utilize experts who are well versed in payer contracting strategies. We have the tools necessary to provide you with quantifiable results that directly impact your bottom line.

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