To negotiate a fair price for any product or service, both parties need accurate information on the fair market value of the item. But too often, healthcare organizations enter payer contract negotiations in a weakened position because they are blind to local claims rates.
With the right preparation and insights into payers’ actual local and national claims rates, healthcare organizations can maximize payment terms during negotiations. Follow these three steps before your next payer meeting to learn how to get these key insights and ensure a more favorable outcome.
1. Source the Right Data
Objective, data-driven insights based on actual payer rates 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 for both payer and provider, consider how the following types of data can make these negotiations more productive and efficient:
- Reimbursement rates listed by provider, service line, and payer
- High versus low versus average reimbursement comparisons by payer and Healthcare Common Procedure Coding System (HCPCS) code
- Service line and provider codes ranked by which drives the most revenue for your organization
- Comparison of your reimbursement rates to others in the market
- Overview of how the payer’s reimbursements have trended over time by year and quarter
- Comparison by locality to benchmark how your market compares to others
Syntellis’ Axiom™ Market Reimbursement Analyzer arms healthcare organizations with this intelligence, so leaders can facilitate more informed discussions and confidently propose rate changes that are agreeable to both payer and provider.
2. Come with a Plan
Before a payer negotiation, clearly define goals for what you hope to achieve and where you’re willing to compromise. Leverage the data insights from Step 1 to create a logical, fiscally reasonable proposal that will be hard for the payer to contest.
Consider outlining how you can reduce expenses and then negotiate to have a portion of those savings returned to your organization. A win-win approach, this play is beneficial to both provider and payer, as the payer can cut costs and pass on the savings to your organization, without hurting their bottom line.
One way to do this is by ranking service lines and provider codes by those that drive the most revenue for your organization, allowing you to clearly see the procedures that are most beneficial to your bottom line. With this data, you’ll know where it’s important to push for a higher reimbursement rate and where to compromise.
3. Maintain a Win-Win Mindset
Always remember that both provider and payer come to the negotiation table with economic goals, business concerns, and growth plans top of 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. Insights from multiple perspectives will help you look for win-win opportunities.
HFMA suggests you create a “comprehensive payer profile” by reaching out to the payer in advance to understand their contracting goals, mining internal claims data, scrutinizing denials, and connecting with your revenue cycle staff to ask about current payer issues. The more detailed your payer profile, the better prepared you’ll be.
Lastly, consider the type of payer-provider relationship you want. Your approach will vary depending on whether this is a one-time negotiation or the beginning of a long-term relationship, but either way, approach your next payer negotiation with a data-driven plan that ensures both sides win.
Learn how Syntellis’ Axiom Market Reimbursement Analyzer can strengthen negotiation positions and maximize payments with transparent, market-specific payer claims data.
This blog post is adapted from a piece originally written by Tony Camarata.