Preparing Your Practice for Successful Payor Contract Negotiations
By Courtney Stevenson
In many state throughout the country, medical practices are beginning to resume surgeries and procedures that CMS previously placed on hold. The precautions taken to preserve personal protective equipment and mitigate the spread of COVID-19 caused us to see a significant decrease in the volume and types of procedures that can be billed. While hospitals are working to ramp up services, payors are tackling telehealth, and a majority of elective (and revenue-generating) procedures are on hold, what can practices do to prepare? One often overlooked operational activity medical practices should be focusing on during this time is reviewing payor contracts; this is a good time to put a plan or process in place to renegotiate with payors.
First and foremost, it is advisable for practices to complete a market/payor assessment. Unless contracts are stored in a binder or in a central location, you may need to request copies of your agreements. Depending on how organized your agreements are, it may be worth the time to reach out to payors to verify the agreement on file is the most current. Once you have accessed all your payor contracts, you can create a payor matrix A payor matrix can be used to compare language terms and rates among payors and will allow your organization to quickly identify how to prioritize negotiations. In preparing for renegotiation, it is important to understand negotiation windows and when you can begin renegotiation of your agreements.
CPT CODES & MODELING
Once your agreements are sufficiently organized, it is important to establish an understanding of your organization’s top CPT codes and develop a modeling mechanism. Of your top CPT codes, consider what drives most of the revenue. Are there new services to consider or CPT coding changes that may impact your practice? Have a clear understanding of current billing or payment issues your practice is experiencing, as these issues may become necessary to use for leverage further along in negotiations. It is also important to understand if these issues are common among payors or isolated to one specific payor. If it is the former, you may need to consider that the issue might reside with your billing team and not necessarily the payor, leading to an opportunity for course correction.
It is unlikely, though not impossible, that if you submit a proposal to the payor first, they automatically accept it or vice versa. You should be prepared to sell yourself and make a case as to why your organization is deserving of particular rates. Take the time to articulate your practice’s “vital stats” and understand how your practice compares to the competition. Research the payor market position and goals, and try to develop your strategy so that it may align with payor initiatives– making it easier to get where your practice wants to be. Your story should be told in written format; make it appealing and simple, memorable, and easily repeatable.
At this point, you should be organized and prepared to begin engaging in negotiations and developing a proposal for the payor. By taking the time now to understand the market, competition considerations, and payor product initiatives, you can arm yourself with knowledge and data to engage in meaningful and advantageous conversations with payors.
Courtney Stevenson has over a decade of experience working with insurance providers and physicians. In her role as Payor Contracting Specialist at DataDx, Courtney works with medical practices to help them successfully negotiate contracts for healthcare plans and ensure contracts are carefully aligned with their practices. Courtney enjoys developing strong relationships with her clients to understand their challenges and goals.