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Payer contract negotiations are an essential part of practices expanding their revenue and guaranteeing sustainability in the complex healthcare industry. These contracts determine reimbursement rates and play a crucial part in provider credentialing. And top payers can make contract negotiations challenging, especially for small, independent healthcare providers looking to stay competitive amidst the administrative burdens. Here's a guide to making smart decisions with your payer contracts and the negotiation process, and how your practice can thrive with the help of a healthcare industry expert such as PayrHealth.
Why Are Payer Contracts Important?
Payor contracts are an essential piece of your healthcare organization's revenue cycle. From determining reimbursement rates to reflecting regulatory changes to reflecting your fee schedule, payer contracts (especially from top payers) determine where whether each reimbursement will show a favorable outcome to your revenue or not. This means that negotiating payer contracts is essential to the financial health of your practice - so, the contract negotiation process shouldn't be ignored.
Recognizing Top Payors
Healthcare organizations have to be aware of the top payers in their market, since it will affect industry trends and industry standards at every level. In addition to the fact it's essential to understand whether your practice is being sufficiently reimbursed for covered services, it's also essential to be sure the contract language is fair and takes into account changes in market rates over time.
Healthcare providers should understand how each payor factors into their revenue cycle, considering the reimbursement rates and payer's network against the practice. Make sure to get a duplicate of any proposition well before negotiations. Make sure to also review it with our payor contracting team to determine if it's the best option for your practice.
The more you know about your payer contracts, the more effectively you can negotiate and secure favorable terms at the bargaining table. Firstly, though, you have to know your reimbursement rates and understand why asking for 3% more every year is reasonable and even beneficial to your operational efficiency. Better yet, understanding your payer and having a clear understanding of their needs will help you enter mutually beneficial terms and facilitate a better relationship long term.
5 Steps to Better Payer Contract Negotiations
- Use general negotiation best practices
- Play out a SWOT investigation of the practice
- Gather data
- Foster a payor contact framework
- Foster the payor contract negotiation objectives, needs, and plans
Providers who use these five steps gain at least a basic understanding of their practices, giving them the confidence and information they need to make the payer contract negotiation process go smoothly. Knowing which payors are driving the most volume and looking at contracts to guarantee they're fairly reimbursing is an essential first step in determining your ideal contract terms.
Payer Contract Negotiations with PayrHealth
At PayrHealth, we're your best partner in payer contract negotiation and work with healthcare providers of every specialty to secure better reimbursement rates and contract terms. Our expert team can help you prepare for the negotiation process and understand the best ways to secure a better financial future for your practice. We can also perform in-depth analysis of your contracts, the reimbursement rates, payment terms, and much more. Learn more about how you can elevate your operational efficiency and get rid of the administrative burden of contract management. Contact PayrHealth today to get started.
