What are insurance contracts? These are contracts between a managed care organization (MCO) and a health care provider. While healthcare contract management along with negotiating insurance contracts is widely regarded as a difficult and sometimes contentious process, it is also a necessary challenge that a medical practice must face. Though some providers may choose to simply accept the terms of an insurance payor’s contract, taking the time to negotiate insurance contracts can result in more favorable contract terms that make a significant impact on your bottom line over time.
Thankfully, you can employ strategies to make the insurance contract negotiation process less contentious and more likely to result in a favorable outcome. Let’s dive into our top tips for providers who are in the process or are thinking about beginning an insurance contract negotiation.
Begin the Process Early
One of the biggest mistakes providers make is not allowing enough time for the negotiating process to take place. While there is no hard and fast rule for how long the average payor contract takes, a good rule of thumb is that the process will take anywhere from six to nine months.
Begin the negotiation process early to give yourself the most flexibility during negotiations. It takes time to move a contract proposal through a payor’s bureaucracy, and delays are to be expected. Anticipating those delays and accounting for them in your plans will ensure you aren’t put in the position of having to accept unfavorable contract terms, such as lower reimbursement rates, because the clock is running out.
Work From the Bottom-Up
It may be tempting to submit your contract proposal to the highest possible authority in the payor’s organization. Not only is this a bad idea, but it can often be counter-productive. While the individual contact will vary depending on the payor’s organizational structure, it is most commonly the manager in the contracting department. If you go straight to the top, there’s a good chance your contract will get kicked down to the contracting department anyways, and there’s a very good chance the person making the decisions in that department won’t look kindly on you going over their head.
Rather than taking that approach, use the correct channels for submitting your contract and be patient with the process. Aren’t sure who to submit your contract proposal to? Work with our team at PayrHealth. We understand the importance of relationships in insurance contracting negotiations, which is why we maintain an up-to-date database of contacts so that we know exactly who to contact to get results.
Negotiating a new insurance contract, or renegotiating an existing one, will take time, patience, and persistence. Be aware of this fact ahead of time so that you can strategize for the long haul. There are times you may not hear back from a contact, or it may seem like your concerns aren’t being heard.
Persistence is a key factor that separates failed negotiations from successful ones. Don’t make the mistake of walking away from the negotiating process early, even if it seems like it’s not progressing.
Understand Your Value and How to Communicate It
Successfully negotiating an insurance contract will require you to understand what makes you as a service provider unique. You, then, have the responsibility of deploying an effective strategy to communicate that to the payor.
payors are interested in how providers add value to their portfolio. If you’re in a saturated market where it’s hard to stand out, your negotiating power will be less. However, if you have unique services or a delivery model that produces better outcomes, drawing attention to that can help you rise above the competition. Understanding how to do this is essential for realizing more favorable terms during the negotiating process.
Expand Your Team
Many providers choose to forego negotiating insurance contracts entirely due to their difficulty and the perceived power imbalance in the contract negotiating process. This isn’t without merit, but it can hold providers back from achieving more favorable contract terms.
If you find yourself in this position, consider expanding your team by partnering with us at PayrHealth. We help providers like yourself navigate the managed care contract negotiation process. By using a proven, data-driven approach, we can help you better understand the negotiation process and how to use it to achieve the terms that you want to see.
We do this by helping providers create payor profiles for each payor they are negotiating with. We help you understand how to identify and communicate your value proposition to payors, and leverage that data to achieve more favorable managed care contracts.
Negotiating different types of insurance contracts is challenging, but with preparation and the right tools and team in place, you can maximize the benefit you realize from your insurance contracts. Aren’t sure where to start? Begin by contacting our team at PayrHealth.
We’ve got decades of experience helping physician practices and others like you achieve more favorable contracts with payors. We’ll help you develop a negotiation comprehensive strategy before entering and work closely with you to navigate the negotiation process.
To learn more about how our team at PayrHealth can help you, please contact us today!
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