Keys to Creating Win-Win Scenarios for Everyone Involved
The weight of the decisions made during payer-provider contract negotiations is lost on no one. The terms and contract details agreed upon during these discussions will considerably impact your operations for at least the next year, if not longer. It’s helpful to remember that payers, too, come to these meetings mindful of the implications and with their own set of financial pressures. But with the right preparation and data insights, your next round of payer negotiations can be your most productive yet. Below are three steps we’d recommend you take before your next payer meeting to ensure a more favorable outcome for all parties involved.
1. Gather the Right Data
The need for data insights that can inform your position is critical. The right insights can show how your payer contracts compare to the market, how payer rates have changed over time from facility to facility, and highlight financial opportunity. With the goal of creating a win-win scenario, let’s consider this from the perspective of how data can make it possible for everyone to leave the negotiation table a winner.
Here’s the type of intel that would be helpful to collect:
- Reimbursement rates listed by provider, service line, and payer
- High vs. low vs. average reimbursement comparisons by payer and code
- Service line and provider codes ranked by the ones that drive the most revenue for your organization
- Your reimbursement rates in comparison to the market based on CMS Physician Fee Schedules
- An overview of how your payer’s reimbursements have trended over time by year and quarter
- A comparison by locality to benchmark where your market stands vs. other markets
Armed with this intelligence, you’ll be able to approach your next payer meeting with insights that can drive more informed discussions and you’ll be equipped to propose rate changes that are amiable to both you and your payer.2. Come With a Plan
It’s immensely helpful to come to your negotiation with clearly defined goals of what you hope to achieve, and mindful of where you’re willing to compromise. Utilize the data insights referenced above to create a logical, fiscally reasonable proposal that will be hard for your payer to argue with.
MJH Life Sciences suggests that you “create a spreadsheet of all your payers, rates, filing deadlines, and most commonly used codes.” Collecting this information in an organized manner will help you identify opportunities, prioritize where you need to renegotiate, and highlight where you’ll be willing to give and take during the negotiation process.
Consider outlining how you can reduce expenses and then negotiating for a portion of those savings to be returned to your practice. Applying the win-win attitude we’ve been discussing, this play is beneficial to both you and the payer, as they will be able to cut costs and pass on the savings to you, without hurting their bottom line.
As mentioned above, ranking service lines and provider codes by the ones that drive the most revenue for your organization will allow you to highlight the procedures that are most beneficial to your bottom line. You’ll know where it’s key for you to push for a higher reimbursement rate and where you’re willing to compromise.
3. Maintain a Win/Win Mindset
As a reminder, both you and your payer come to the negotiation table with economic goals, business concerns, and growth plans in mind. While your goals are understandably your top priority, it helps to consider that payers will likely be more flexible and amiable to your contract requests if it’s clear you’re considering their position alongside your own. This is why it’s helpful to collect reimbursement rates by provider, service line, and payer. Insights from multiple perspectives will help you look for win-win opportunities.
This HFMA article suggests you create a “comprehensive payer profile.” As noted in this article, Paula Dillon, director of managed care for Rockford Health System, supports this idea saying “A panoramic view can offer insight into what your payer hopes to gain from the negotiation and what they bring to the table. The old adage ‘know your audience’ applies here—the more detailed your payer profile, the better prepared you will be for negotiations.”
The AAPL also suggests doing research to understand what potential system issues your payer may face, so that mutually beneficial common ground can be achieved. It doesn’t do any good to negotiate a contract that your payer can’t implement in their systems.
Finally, just as any good sales rep would before a potential client meeting, do some legwork ahead of time to get to know your payer on a personal level. This is especially helpful if you’re working to develop a long-term partnership and not a one-time negotiation. Try to uncover some of their personal interests, hobbies, or professional accomplishments through LinkedIn or other social networks. Research news updates or interesting events happening in their community. This will provide a way to connect with your payer at the onset of the meeting and will show that care about their life outside the office.
In summary, approach your next payer negotiation with a data-based plan and strive for a meeting where both sides win. With this mindset and the right preparation, you may be pleasantly surprised at the results.
If you’re in need of a tool to help you collect the much needed data, Stratasan’s Market Reimbursement Analyzer (MRA) can help. This tool will equip you to understand how your contracts compare using market-specific reimbursement data. You’ll have access to reimbursement rate visualizations by service line and by payer over time.
To learn more about how the MRA tool can equip you with the data insights needed to successfully navigate your next negotiation, schedule a discovery call with one of our experts today.