Tips for negotiating a better contract
To ensure successful contract negotiations with managed care payers, be ready to sell yourself as a valuable asset to the payer, says Vicki Axsom-Brown, administrator, Anderson Eye & Ear Associates/Medicus in Anderson, SC. "Make sure the payers know how you can help them provide better service to their own clients," she says.
Use the research you’ve gathered prior to negotiating to show this value, she suggests. If a payer is adding employers whose employees had typically been using you or your physicians as a provider, show this as an example of how you can help the payer by offering the new employees an easy transition into new coverage, she explains.
Use outcomes and trend data to support the fees you want, Axsom-Brown recommends. Also, find out what the payer has been reimbursing other providers for procedures.
"Explanation of benefits [EOB] statements that show the levels payers are reimbursing our competitors are very helpful," she says. She typically gets copies of these EOBs from family members of her own staff members, she explains.
This specific information demonstrates to the payer that the same-day surgery manager is knowledgeable. "This keeps the payer from saying No one else has asked for this fee before,’" says Axsom-Brown.
With fee schedules, the payer typically looks at the top 25 procedures and offers lower reimbursement for the top 10 most utilized services, then slightly higher reimbursement for the next 15, says Axsom-Brown.
Start with a game plan
When evaluating the fees, be sure you take into account the volume, she recommends. The higher reimbursement for the 15 procedures might not offset the reduced reimbursement for your most frequently performed procedures if you only perform them a few times each year, she explains.
Make sure you don’t accept a loss or extremely low reimbursement if your high-volume procedures are the mainstay of your business, Axsom-Brown says.
Develop a game plan before you enter negotiations, she says. "Be realistic in your expectations." Axsom-Brown always develops a list of "must haves" for herself. Her list has is divided into three categories:
• "I can’t live without."
• "Highly desirable, so I won’t give up early."
• "Ice cream."
Have a category with items to give up
The "ice cream" category includes rates that she can live without, and these are generally among the first things she’ll concede, she says.
"I complain about conceding any fees, but I know which ones are the most important to me," she says. By having some fees on which you are willing to compromise at the beginning, you set an agreeable tone for negotiations, Axsom-Brown explains. "You want to avoid an adversarial relationship and keep negotiations moving forward," she adds.
As negotiations continue, Axsom-Brown may compromise on other fees that she has described as highly desirable if she thinks it is necessary. Her prioritized list of "I can’t live without" that she develops for herself prior to the negotiations keeps her focused on what is most important to her program.
A road map is important, says Douglas Peter, vice president of managed care for Nashville, TN-based SymbionARC, which owns or manages 20 same-day surgery programs. A same-day surgery manager should develop a proposal template that takes into account the surgery program’s specific case mix and costs associated with procedures. The template can spell out priorities for the same-day surgery program and help the negotiator stay on track, he says.
When you reach an impasse on a certain procedure fee, you always have the option to carve it out of the contract, says Axsom-Brown. When you are not able to reach an acceptable compromise for a procedure’s reimbursement, remove it from the contract and move forward with the negotiations, she explains.
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