Credentialing and contract negotiations can be very challenging. Here are some tips to help you get started!
8 Steps to Successful Insurance Contract Negotiations
#1: Start- decide you are going to do it, and follow through! Don’t avoid it just because it can seem intimidating. If you don’t have the resources in house to accomplish it, outsource it.
#2: Do your homework. Start by reviewing the numbers and your payer mix. Calculate revenue per visit and CPT comparisons.
#3: Decide which companies to start with. Determine what your breaking even point is (average monthly expenses divided by average number of patients per month) then what companies fall below this point are the ones to start with.
#4: Read your contracts thoroughly.
#5: Arrange a meeting.
#6: Know your alternatives to the negotiated agreed upon rates and what leverage you have. (i.e. If you see a large volume of patients of a certain company). Depending if you have leverage or not, you can decide how aggressive to be with the company.
#7: Prepare. Write letters to the insurance company stating your case and why you feel your rates should be better.
#8: Present your case.
If you have a contract in place and need to re-negotiate – keep these tips in mind:
- Before you begin, know that this is a project that will take approximately 6 months and 100+ man hours to complete.
- Try to focus on overall rate increase, not selected codes- ideally a percentage of Medicare.
- Avoid increases based on RVU rates
- Know your area and what your competitors are receiving.
- Don’t forget important codes like labs or flouro or drugs.
- Avoid forever renewing contracts. 2-3 years is ideal.
- Make sure they send you a signed version of the new contract.
- Consider the impact that dropping a contract could have on key referring physicians.
- Check your EOBs to make sure they have converted to the new fee schedule once the contract is in place.
- Don’t be tricked by CPT specific adjustments. (I.e. A 15% increase on E/M codes but a 5% cut in procedures could be worse than your current contract).
- Start with a smaller insurance (in your payor mix).
- Develop relationships with all your insurance reps.
- Fees are not the only thing to negotiate (also can work on authorization process, period allowed for denials, period for submitting claim).
Questions to ask as you get started with credentialing:
- In-Network vs. Out of Network? Consider the pros and cons.
- Is the insurance company part of an IPA?
- Are you credentialing as a group or individually?
- Is the panel open or closed?
- Is the provider already contracted under another entity? Can you add your entity to their existing contract?
- If you are credentialing a midlevel, what insurances will contract with midlevel?
** **Keep in mind, every area, insurance company and situation varies**