Strategy for Negotiating Insurance Contracts
Physician Practice Specialists offers both hospitals and physicians managed care contract negotiation services that employ proven contracting strategies, years of experience and the most advanced tools available. Our professional team develops an personalized contracting strategy for every client that fits their unique practice and objectives. Successfully negotiating a contract does not happen overnight but the outcome is typically very rewarding.
Step 1:Development of Contracting Strategy
Our strategy is derived from decades of successfully negotiating contracts from the physician and payer side. Our experience is from both sides of the equation which gives us unique insight into what the payers are looking for and need out of their physician contracts. The strategy employed for each group will be different but some common elements are: the identification of key payors to contract and/or renegotiate with, evaluation of the physician environment to identify future contracting opportunities and pitfalls, determine current market rates with other payers, identification of group’s core competencies, evaluation of competition and how it helps or hurts our position, and the highlighting of potential cost savings and outcome based strategies to present to insurance company.
Step 2: Evaluation of current managed care contracts and fee schedule
This is a critical part of the process as it provides us with the insight needed to develop a succinct strategy for renegotiation. We require numerous reports during this phase of renegotiation and to enable use to generate an excel spreadsheet that analyzes each contract weighted by the most frequent CPT codes as a percentage of annual revenue. We then compare the payer’s fee schedule to current year Medicare and set our goals as to what we expect as a result of our negotiations.
Step 3: Contract Renegotiation and Consulting
We assess each contract and determine if it meets the contracting requirements of client. We also ensure that the rate they claimed to give is actually what is present in the contract. Once the renegotiation process is nearing completion we will recommend a percentage of Medicare that should be billed out. This is usually between 150%-200% depending on insurance rates. Some contracts will pay a percentage of billed charges (although this is rare) so it is important to have your charges at an adequate level to capture all potential revenue.
Timeframe and Costs
The timeframe for the completion varies by area and the cooperation of both the insurance companies and respective client.Typically, clients can expect anywhere from ninety days to six months. Constant dialogue is needed between client and PPS in order for the contract negotiations to be successful.