7 Tips for Building Great Commercial Payor Relationships
Jeanne Gilreath and Brice Voithofer are executives at AdvantEdge Healthcare Solutions, a medical billing, practice management and coding company. Ms. Gilreath is the senior vice president and Mr. Voithofer is the vice president of anesthesia and ASC services.
Here are their seven tips for ASCs to build great relationships with commercial payors.
1. Be prepared for negotiations. One of the easiest ways to earn respect from a commercial payor is to do your homework prior to contract negotiations. Ms. Gilreath recommends working with a full-service billing company rather than managing your own negotiations.
A third party billing company can collect your ASCs claims history, including in- and out-of-network data, to provide to the payor. Using a service can relieve pressure on your center and ensure accuracy.
Another benefit is that billing companies have worked with commercial payors before and have established ties with them.
"Billing company consultants also have established relationships with the contracting departments of commercial payors," she says. "These relationships can provide a significant advantage over the ASC facility director who might be less experienced in payor contracting process."
2. Stay realistic. ASCs should always approach payor relationships and reimbursement rates realistically. Know your market and understand reasonable prices for a service or device, Mr. Voithofer says.
Having knowledgeable, realistic expectations can foster a positive relationship with payors rather than a combative one.
"Trying to get the most bang for your center's buck is crucial, but you also need to stay within reason of what you ask for or demand," he says. "Some centers take the approach that the starting point is 'we'll go non-par if these fail' but that isn't a good opening strategy."
ASCs may suffer financially because their costs are out of line or they are paying too much for distribution. "If you are trying to correct a bad contract that occurred years ago, the best approach is to sit down with the payor to discuss what you need," he says. "The rate is not always the best thing to attack. There are other terms of the contract and carve-outs that are key to successful contract negotiations."
3. Work through the network group. A payor's network group includes the payor contract negotiators, network managers and the provider relations representatives. Ms. Gilreath recommends contacting the network group when you are ready to approach your commercial payor.
She recommends being prepared to discuss several topics, such as:
• The cost of care
• Your case mix
• Your payor mix
• The safety of your facility
• Your accreditation
You should also know what your payor will cover and how those services apply to your center.
"Obtain a clear definition of preauthorization requirements to ensure that procedures performed will be paid," she says. "The cost of care information will be at the top of the payor’s list."
4. Make a strong case for your desired rates. It is not realistic for an ASC to expect highly favorable rates from a payor from the start, Ms. Gilreath says. However, surgery centers can develop a reputation for being thorough and strategic, gaining the respect of payors.
Rates will begin to improve after negotiations with well-planned strategies and supporting documentation. "Demonstrating a strong business case for the rates proposed to the payor has merit," she says.
Also work to develop a favorable cost profile and show payors you can lower their costs while resolving claims. Bring viable data and statistics to negotiations to prove why you deserve certain terms.
5. Be transparent and communicative. Many ASCs' strained relationships with payors stem from lack of communication and transparency. Rather than fixing the issues, both parties become complacent with the situation and assume needs are met, Ms. Gilreath says.
"There are many ASCs that maintain a preferred status with payors," she says. "An ASC that is considered preferred means that the ASC has accepted lower rates. As a result a payor will 'steer' volume to the ASC before the payor offers higher rates."
To avoid misconceptions on either side, work to be clear and address problems in a straightforward, timely manner. Ms. Gilreath says, "Willingness to compromise to fix the strained relationship will go a long way in maintaining a valuable relationship."
Mr. Voithofer also recommends sitting down with a payor representative and talking about problems. Be cautious of overusing technology when trying to develop meaningful interactions.
"We have come to rely on email and phone way too much for all facets of business these days," he says. "The more you can sit down face to face with a payor, the better chance you have to bring the relationship back in line."
6. Work to save payors money. Though it may sound counterintuitive, helping your payors save money will bolster relations and build trust. It's possible to receive fair contracts that also benefit your payors.
"Any process or contract relationship that reduces the cost of doing business and improves the payor’s return on investment will help maintain a positive relationship," Ms. Gilreath says.
You can also save your payors money and benefit your ASC by implementing effective EDI administration, reducing your denials and claims rework and making sure par providers will do business with the ASC.
Continue to review your cost of business, she says, and look for ways to control costs to show payors you have a well-run ASC. "You have the ability to save significant money by offering lower costs to commercial payors while maintaining an acceptable profit margin," she says.
7. Stay positive. If ASCs stay focused on developing contracts that are positive for both the center and the payor, they will be more successful than looking for a one-sided solution, Mr. Voithofer says.
Trying to bully a payor into higher than market rates will never result in beneficial terms or relationships. Rather, "approach contract negotiations with a level and reasonable posture," he says, and avoid a "my way or the highway" demeanor.
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