Payor Contracting

How to Improve Payor Provider Collaboration For Independent Practices

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As a healthcare provider, your primary focus should be on providing quality value based care and service in your patients' best interests. But even as an independent practice, there are external organizations you have to answer to. It becomes increasingly difficult to do your job when you're at odds with the "other side."

If you can't get them to join your side, you can at least meet in the middle. But how?

A larger payor contract management service, like PayrHealth, can provide the necessary systems and infrastructure to ease into the future of healthcare with renewed collaboration and ways to cut costs.

This quick guide will provide an outline for initiating effective collaboration and communication within your payor provider relationship.

Collaboration for a New Future: Value-Based Care

There has long been a divide between payors and healthcare providers. Still, as the industry moves towards value-based care-sometimes called accountable care-both sides are working towards exactly that: accountability.

Accountability is just one of the many vital facets of greater collaboration between healthcare organizations and payor relationships.

Independent practices are perfectly positioned to lead the shift towards value-based care because of their more personal relationships with patients, but they also have unique struggles because of their smaller organizations and less sophisticated data systems.

Embracing the Collaborative Payor Provider Model (CCPM)

The Collaborative payor Provider Model follows the goal-oriented Triple Aim framework-improved experience of care and overall health with lower costs.1 This model has a three-pronged approach to increased collaboration and, ultimately, success:2

  • "Radical alignment of incentives between payor, physicians, and patients"
  • "Complete clinical, financial, and comparative performance transparency"
  • "Reciprocal responsibilities and accountability"

Of course, there are additional collaborative strategies and resources outside of this model, but studies have already shown success within this methodology. Let's dive into the effective strategies of CCPM and beyond.

#1 Payor-Provider Alignment in Goals & Incentives

As providers and payors adopt value-based care, the incentives have to change, too, in order to allow for an "Everybody Wins" mentality.

There are several components to this newfound alignment that should be documented and solidified within payor contracts:

  • Risk-sharing- Traditionally, doctors and practitioners have had to bear the burden of risk; payors had no incentive to invest in the care provided or techniques used. According to the CCPM, the provider would get 80% of the share while the payor would receive 20%-this means the payor's economic success relies on the provider's success. By linking your financial futures, both parties have to be on the same team.
  • Value-based incentives - The value-based system has started to replace the traditional volume-based system. Long-term, preventative care can cost more time and money up front but will save on both by minimizing the use of expensive, drastic treatments later on. By rewarding the provider and payor for quality of care-health outcomes, patient satisfaction, treatment success-there is a common goal, which requires shared strategies.

#2 Systems to Facilitate Complete Transparency Between Payor and Provider

The first step is sharing foundational goals and incentives, but for these benchmarks to be achieved, both parties need a way to quantify their own and each other's progress. This builds trust and accountability-two cornerstones of meaningful collaboration.

The shared records and reports should include:

  • Financial information, including the payor's revenue flow, risk adjustment, and distribution of remaining funds and performance bonuses.
  • Clinical data, such as patient health records, to be analyzed.
  • Comparative performance statistics, can be used to create goals, update progress, improve best practices, and identify weak points.

If both sides have more comprehensive, detailed data to work from, they can each create their own improved systems, identify and share potential areas of improvement, and hold everyone accountable.

The best way to acquire something you want is by providing equal value in return. In situations where payors seem to hold a lot of the power, independent practices can propose an agreement that benefits both parties-this is a form of compromise and collaboration.

Negotiate the deals you deserve! Let's get started!

#3 Reciprocal Responsibility for Outcomes & Cost Management

Under a model of reciprocal responsibility and accountability, all parties-payors, medical practices, and individual physicians-must work together to minimize unnecessary expenses and wasteful care procedures. In turn, this maximizes profitability, a benefit to both sides.

The Accountable Primary Care (APC) model has nine suggestions aligned with the Triple Aim Plus One framework. The "Plus One" refers to the added goal of physician satisfaction, as well as patient satisfaction, successful medical outcomes, and low costs.

These nine suggestions (known as the "9 Cs") are the first steps your independent practice can take in forging positive, mutually beneficial partnerships with payors while advancing your own clinical interests as well:3

  • First contact- Patients should enter into the medical system with a visit to their primary care provider (PCP). In analyzing 20,000 patient episodes, this cost 53% less than any other entry point.
  • Comprehensive care- PCPs should offer a wide range of medical services to adequately address most, if not all, of their patient's needs.
  • Long-term, ongoing, patient-focused care- In long-term doctor-patient relationships, the provider has a more intimate understanding of the patient's medical history and can better prevent, diagnose, treat, and plan for any health issues. This reduces the costs of redundant screenings and tests.
  • Coordinated care- PCPs should limit the number of care transitions a patient has to go through, including specialist referrals and other inconvenient adjustments.
  • Credible, trustworthy care- Patients who trust their primary physicians to provide effective, personalized care are less likely to request costly, unnecessary specialist visits and advanced tests.
  • Collaborative learning - Providers and payors should work together to collect, share, and analyze relevant data to create clinical decision-making guidelines and best practices that benefit both parties.
  • Cost-effective care - This is typically a side effect of the other eight Cs, but care providers can further this goal through education, care management, and intentional clinical decision-making. It's also based on the 5 Rs: the right physician providing the right diagnosis and care at the right place and time. payors can assist physicians by supplying integrated clinical and claims data regarding healthcare costs.
  • Capacity expansion- To account for the lack of interest in primary care roles, current PCPs have to increase productivity via virtual appointments, greater reliance on nurses and other clinicians, and geographic pod-based nursing assignments.
  • Career satisfaction- Job dissatisfaction among providers can lead to higher turnover rates, which creates knowledge and procedural gaps among new physicians. These gaps can lead to costly mistakes and wasteful care-a problem for both payors and providers.

Whether directly or indirectly, these nine strategic adjustments increase provider accountability, responsibility, and cost-effective practices. By prioritizing profitability and quality, your independent practice can better work alongside payors, who often share these same goals. In turn, you may be in a better position to negotiate favorable contract conditions, too, especially if you can provide concrete statistical data to back up your practice's cost-effectiveness.

#4 An Automated Utilization Management System

Many facilities still rely on a manual utilization management process, which is how payors approve provider requests to deliver medical care. It's currently one of the slowest, most inefficient systems within the payor-provider relationship.

An automated system with an exception-based approval process would eliminate administrative strain, unnecessarily long wait times, and money wasted on a time-consuming manual process. With an exception-based approach, the provider and payor would agree on a set of rules for procedures, treatments, and referrals to be automatically approved. Any exceptions to these predetermined rules will require a manual review.

In addition, PayrHealth can act as a huge provider resource to help with ongoing payor management and to increase revenue.

Collaborative Contracting With PayrHealth

It's most beneficial for independent practices with less organizational power to outsource their contract negotiations to seasoned professionals. It's one thing to have these goals in mind, but another to achieve the results you want.

With PayrHealth, you'll have a team of professional, objective negotiators on your side, helping you arrive at strategic decisions, identify your unique value propositions, and argue in favor of contracts that benefit both you and your overarching goals of a collaborative partnership.

The first step to meaningful payor provider collaboration is joining forces with PayrHealth. Through your partnership with us, you'll be able to enhance your relationships across the board.


  1. Institute for Healthcare Improvement. The Triple Aim: Care, health, and cost.
  2. Healthcare. The Collaborative Payor Provider Model Enhances Primary Care, Producing Triple Aim Plus One Outcomes: A Cohort Study.
  3. The American Journal of Accountable Care. The Accountable Primary Care Model: Beyond Medical Home 2.0.
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