Initial physician reimbursements rates are rarely determined by experience or skill. More often, payors will start with the lowest reimbursement rates in the contract. The good news is that you can renegotiate your reimbursement rates. This can seem intimidating, especially if you practice on your own or are part of a smaller practice, but you actually have more tools at your disposal than you think. With a strong case and plenty of research, you may be able to renegotiate and get more money for you and your practice. Learn more about how to negotiate physician reimbursement rates below.
Do Your Homework
As a physician, your job is to provide care to patients and ensure their health and quality of life. Insurance companies are less interested in patient care and more invested in maintaining financially solvent and pleasing stakeholders (mainly comprising employer groups and the patients who pay premiums). Understanding where your interests overlap is a big part of negotiating physician contracts. That often starts with numbers, figures, and other hard statistics that show concrete evidence of why you deserve higher reimbursement rates as a health care provider.
That means doing some homework and understanding the value that you provide in quantifiable numbers in order to use them in payor contract negotiations. Analyze your payors’ fee schedules and determine where you break even. It may help to also look into any special concerns that the payor might have. For instance, they may be most interested in keeping hospitalization rates low as part of their payor strategy. Come prepared to the negotiations with any numbers that could show how you and your practice accomplish that.
Know and Show Your Value
Knowing your practice’s value and being able to demonstrate are the keys to increasing your reimbursement rate. That value is built by an analysis of your strengths, weaknesses, opportunities, and threats.
- Strengths refer to any positive internal attributes that you and your practice provide. This can range from fields of expertise to high patient satisfaction.
- Weaknesses are any areas where your practice might be lacking and could see some improvements. This may include staffing problems and outdated medical equipment.
- Opportunities are any external factors that can have a positive impact on your practice, usually in conjunction with your existing strengths. Opportunities can contribute to further growth and expansion into new fields.
- Threats are external factors that can cause potential issues for your practice. For example, a competing practice opening within your neighborhood poses a potential threat.
Be prepared to have data available that demonstrates each of these items. payors are usually the most interested in weaknesses and threats.
Review Existing Contracts
Unless you have already been through a round of negotiations, chances are that your reimbursement rates have not changed. Accounting for inflation, you are likely losing money if you have the same rate. To address this issue, look at your existing contracts to determine any payors who may not have sent or signed any updated terms of agreement recently. It is also a good idea to understand the expiration date on your existing contracts and the amount of time necessary to send your suggested changes during the provider contracting process.
Request Cost-of-Living Increases
If you are having trouble getting your payors to agree to any of your data points or negotiations, at least ask for a cost-of-living increase. Cost of living comprises staff salaries, rent, and other common overhead costs. Most payors should not have a problem increasing your money if the expenses to run your practice have increased. If your practice experiences issues from cost-of-living expenses and goes out of business, any patients insured through the payor will have to go elsewhere, and payors don’t want to lose business.
Be friendly but firm in your negotiations, and do your best to find a common ground. If all else fails, have an expert look at your reimbursement contracts to detect potential problem areas.