This is an excerpt from our webinar “Unlocking Revenue Through Contract Negotiations”, part of Rivet’s Revenue Cycle Webinar Series. Watch the webinar on demand here.
You put in the work of collecting and compiling contracts, designated the member of your team who will be negotiating on behalf of your practice, and connected with the right person from the payer to begin negotiations. On top of that, you defined successful outcomes and were ready and prepared to negotiate. Great work! While you have now accomplished the bulk of what goes into a successful payer negotiation, the hard work isn’t quite done. If you are not organized during the time between actively negotiating and implementing a payer contract, a lot can be missed.
In general, it takes about two months (60 days) from contract signing to implementation (depending on the payer). To stay on top of your negotiation during the in between period, it is important to establish a game plan to accomplish what you came to negotiate:
What are the most effective ways to reach the payer and how do they most like to communicate?
Once the best channel of communication is established, how often will you follow up? Remember, consistency is key.
Create a method for tracking communication with the payer. When did you last touch base and when do you plan to follow up next?
Hold yourself (or your team member if you are not the negotiator) accountable for keeping up to date on the process. In addition, keep the payer accountable. If a payer tells you they will be in communication by a certain date, record it, and if they have not been in contact, follow up with them. Some negotiations will move quickly and run smoothly, while others will play hard ball and may go back and forth for months. Keeping all players accountable will help manage the process more effectively.
As we mentioned in our article on strategic payer contracting, working with payers can sometimes feel like David vs. Goliath, but don’t give up. Focus on staying on top of internal and payer deadlines and don’t be afraid to ask for what you want. To help make the process more manageable, don’t negotiate with your top payers simultaneously, which can lead to stress and confusion. Instead, focus on 3-5 at most to maximize effort.
When negotiating contracts, being informed and aware when approaching the negotiating table will help guard your practice against falling prey to any surprises within your contracts. We recommend keeping an eye out for the following:
When considering the waiting period between a successful negotiation (2-5% range, 6-10% range) and when changes are actually implemented, there are a few places we recommend focusing your efforts. First, make sure your changes are actually implemented by obtaining a signed and executed copy of the negotiated contract. In relation, be sure to confirm the effective date so you can track when payments should start changing. Next, evaluate chargemaster and the internal billed price to ensure you are not leaving money on the table. Then, realign your prices with the new fee schedule allowables and track metrics around cash-to-gross rates (you should see an improvement). Lastly, begin tracking payments from the payer to ensure compliance with the new payment rates. If they do not match your contract and the new reimbursement rate, submit them as underpayments.
From compiling payer contracts to negotiating them, the key to success is to be prepared and relentless. Don’t be afraid to go after the answer that you are looking for. By being diligent in gathering the information you need to protect your practice and by outlining a system for tracking the implementation of your negotiation, you will have laid the foundation for creating contracts that work for your practice.
For more resources on negotiating payer contracts:
Watch the full webinar
Article: Assessing the Landscape when Negotiating Payer Contracts