Payor Contracting

Contract Negotiation Strategies To Help Maximize Provider Revenue

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When it comes to contract negotiations, providers often walk away with money still left on the table. Why? Far too many of them make the mistake of entering the discussion without a plan of action.

Want to know how to negotiate better payor contracts and maximize revenue?

Contract Negotiation Strategies To Help Maximize Provider Revenue

At times, contract negotiation can feel more like a battle than a bargain. To prevent the conversation from immediately getting out of hand, it’s vital that you remember some general best practices for negotiation, including:

  • See whether negotiations are necessary – Some payment problems don’t require a contract evaluation and can simply be resolved via customer or technical support options.  
  • Don’t approach with an adversarial bearing – It’s important to remember that both sides have conflicting objectives. The goal is to find win-win solutions or compromises.
  • Make the first offer – By being the first person to make an offer, you set the tone and have an anchor point for the discussions. Often, this forces the payor representative to make concessions from the outset.
  • Prioritize your issues – Clearly establish a list of priorities, non-negotiables, or key items so that both parties can understand the primary interests. This prevents the conversation from being derailed by a tertiary, inconsequential issue.

Simply doing these things will go a long way towards maximizing revenue. But there’s far more you can do, starting by understanding the contract and knowing how to handle revenue cycle management.


Although they may seem complicated, it’s vital that providers and administrators fully comprehend the various ways that their contract can capture charges and prevent claim denials in healthcare contract management. According to RevCycle, knowing payment rates isn’t enough, you also should be intimately familiar with the core elements of payor contracting, including:

  • The number of days a provider has to submit a claim after a service or visit
  • The number of days a payor has to reimburse the provider for covered services
  • Scope and list of services covered by the payor
  • Reimbursement rates for all covered services
  • Claim denial dispute procedures
  • Term of contract
  • Notice periods for renegotiation and termination

By taking the time to acquaint yourself with all aspects of your policy you not only ensure that you’ll be receiving payments, but also maximizing reimbursement.


You want negotiations to be successful, right?

Then it’s important that you have a clear goal, target, and purpose in mind. By asking the right questions, you can begin to prepare for what’s to come. Important questions include:

  • Who are the payors you want to approach for contract negotiations?
  • What are the results you hope to achieve with each payor negotiation?
  • Who will be leading your organizations’ negotiations?
  • Who is the person they will be negotiating with?
  • What is your plan of action for the initial meeting?

By doing this first, you can establish a clear purpose for every contract dispute.


If you wish to strengthen your bargaining position, it’s vital that you perform a SWOT (strengths, weaknesses, opportunities, threats) analysis. Typically this can be broken down into two crucial sections:

  • Strengths and opportunities – These elements represent your unique value proposition and give you positive leverage over payor negotiators. Positive differentiators include:
    • Convenient location
    • Low competition in the market or a specialized field
    • Sub-specializations
    • Good patient satisfaction and healthcare outcome scores
    • Differentiated service offerings
  • Weaknesses and threats – Facets of your organization that give the payor representative leverage in the negotiation. This might include:
    • A crowded market with other specialists
    • Lack of data on patient satisfaction
    • No differentiated service offerings
    • Unwillingness to compromise or find common ground  

Understanding your strengths and weaknesses helps you prepare your defenses.


Data gathering is one of the most crucial things you can do to strengthen your position. You have to know the payor you plan to negotiate with, your market, your SWOT, as well as that of your competition. According to Healthcare Business Today:

“Payors will be hesitant to increase your reimbursement rate if you don’t provide a sufficient reason why they should pay you more. To persuade your payors, you must gather adequate data to demonstrate the value you provide to them.”

By gathering and analyzing all of this information, you’ll be prepared for anything the payor negotiator throws your way. For instance, you should gather:

  • Patient quality data
    • Internal quality data
    • Patient satisfaction scores
    • Hospital quality data
    • Non-confidential quality payor scores
    • Non-confidential patient testimonials
  • Payor quality data
    • payor quality report
    • payor fee schedule comparison
  • Payor reimbursement performance comparison
    • Denial rates
    • Expected payments performance
    • Days in account receivable
    • Hassle issues


The contract negotiation process isn’t easy. To maximize provider revenue, you must be diligent in your prepwork so that you go to the bargaining table fully armed with the best contract negotiation strategies and ready for what’s to come.

Even then, there’s no guarantee that you’ll be able to get the most out of each negotiation.

This is why many healthcare providers prefer to work with the experts at PayrHealth. We have not only modernized payor contracting, we’ve cracked the code. As your managed care contracting solution, we:

  • Advocate on your behalf
  • Drive growth for your business
  • Strategize with you
  • Get better rates  

Put simply, we can help you sign better contracts at higher rates. With 25+ years of experience, we’ve negotiated more than 50,000 contracts to our client’s satisfaction. We’re confident that we can do the same for you.

Interested? Let’s chat.


Revcycle. Maximizing Provider Revenue with payor Contract Management.

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