How to handle contract renewals
(Editor's note: In the second part of a two-part series on contract negotiations, we give you tips for handling contract renewals, and we tell you how to identify the best potential contracts. In last month's issue, we told you what to do when your contact is up for renewal.)
Keep track of contract renewal dates, and be proactive in asking for rate increases, suggests Brien Fausone, MA, MBA, administrator of the Michigan Endoscopy Center in Farmington Hills.
Put renewal dates on your calendar, sources suggest.
"Many of our contracts don't have a specific term, but they describe a 60-day period in which the facility or the payer can terminate the contract," Fausone says. "This means that we have to be proactive and go back to the payer every two or three years to renegotiate." Payers never call him to say they would like to increase his rate of reimbursement, he adds with a laugh.
When you do renegotiate a contract, be prepared with data that show how your costs have increased, suggests Fausone. The consumer price index related to medical costs in your area, cost-of-living increases, and your own actual cost increases all are good ammunition for your renegotiation efforts, he says.
Managing multiple contracts can be a challenging task, so designating one person to track, manage, and negotiate contracts can be instrumental for success, says Sharon Hohlfeld, contract manager for Physicians Endoscopy, a Doylestown, PA-based ASC development and management company. No matter who handles the negotiations, make sure the person is not afraid to ask for changes, she says.
"You might ask for 20% and get 10%, or you might ask for 5% and get 2.5%, but that is better than not asking at all," Holfeld says. "I've never been laughed at for anything I've requested."
(Editor's note: In the second part of a two-part series on contract negotiations, we give you tips for handling contract renewals, and we tell you how to identify the best potential contracts. In last month's issue, we told you what to do when your contact is up for renewal.)You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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