When Not to Pursue Renegotiations on Third-Party Payor Contracts: Q&A With Curtis Bernstein of Sinaiko Healthcare Consulting
Curtis Bernstein, CPA/ABV, ASA, CVA, MBA, is managing director of valuation services for Sinaiko Healthcare Consulting.
Q: "Is there ever a time when it is better for an ambulatory surgery center not actively pursue re-negotiations on third-party payor contracts?"
Curtis Bernstein: The decision to actively approach an insurance company to renegotiate a contract should be based on the level of services performed under the contract, the current reimbursement under the contract as compared to the market and how the reimbursement has changed under the contract without negotiation.
A number of third-party insurance contracts are tied to Medicare. In a surgery center where third-party reimbursement is tied to current Medicare reimbursement and the center performs a high volume of orthopedic surgery or general surgery cases, for example, negotiating with third-party payors may not result in a favorable outcome for the surgery center.
Also, if third-party reimbursement is fixed as a percent of the Medicare fee schedule prior to 2008 and the center performs a high volume of gastroenterology or ophthalmology cases, negotiating with third-party payors may not result in a favorable outcome for the surgery center.
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