Negotiating Justifiable Contract with Health Insurance Companies

Care providers operate in an environment characterized by multiple payors – Medicare, Medicaid, and a host of private health plans. The prevalence of such multi-payer is reason enough for differences in rates at which care providers are reimbursed despite the clinical procedures more or less being the same. Adding to this heterogeneous payor-environment is the regional differences wherein a physician practicing in an urban state gets reimbursed more than its counterpart in a rural state.  Are we simply to believe that these are irreversible factors, and physicians are left with no avenues but to accept what is offered?

Certainly, multi-payor system and regional factors should never hold you from claiming what you really deserve. If you happen to be as good a care provider as your counterpart in a metropolis, you are entitled to be reimbursed on par with the best rates. This is where your negotiation skills come into the fore – convincing you’re your payors as to why they should reimburse you at the rates given in the fee schedule, equivalent to the CPT codes, and to the maximum extent possible.

The extent to which you can negotiate is often decided by your being in a particular network – HMO or PPO. If you are a HMO provider, your negotiation is limited to Medicare or Medicaid fee schedule.  Medicare, being public plan, reimburses you at a rate which is comparatively less than a physician gets by being a provider in PPO. At best you can insist on getting reimbursed on par with what the admissible CPTs deserve.  But, to insist on being paid at CPT-equated level, you will certainly need to back up with clinical and quality credentials – care excellence, EHR implementation, and compliant coding and billing practices.

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If you happen to PPO provider, being supported mostly by private carriers, can expect variable and maximum scope for negotiation – by being in the PPO network, you can expect to be paid at rates higher than in Medicare fee schedule.  But your payors are not going to be convinced unless you support you claim with valid reasons and proof. Amongst many ways through which you can negotiate better deals with your payors are:

  • Keeping track of history of your claim submission and eventual realization:

    This will provide with variance in your expectation and eventual pay out.  When such variance are brought to the notice of your contracted payors, payors may be inclined to have a relook at the existing reimbursements, and may even amend with higher rates.

  • Being aware of the rates offered by other plans:

    This will help you compare your reimbursements with what your counterparts in the similar field are paid by other plans elsewhere. When these differential rates are brought to your payors notice, they may be inclined to revise to higher rates provided your quality of health care is as good as it is elsewhere.

  • Being aware of geographic advantage:

    If you happen to practice in an area that distinctively know for medical care quality, you try to force this into your advantage; payors are generally convinced of relatively higher level of quality care in urban and metropolis.

  • By threatening to walk out temporarily:

    If your payor is not open to the idea of negotiating, you may consider coming out of the contract. And when you start billing 100% to your patients, patients in turn may switch sides to payors that offer maximum coverage. This may force your original payor reconsider his original stance.

All these seemingly possible tactics would have to be carefully implemented. Care providers, who are primarily focused on clinical job, may be found wanting tactically. This is where medical billers would be sorely required. – with a thorough understanding of multi-payer reimbursement environment – continues to mediate justifiable contract with health insurance companies across the 50 states in the U.S. Irrespective of your being HMO or PPO, our expert team of insurance contract negotiation is essentially driven by the motto: “maximizing your reimbursements”.