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3 Successful Managed Care Contract Negotiation Tactics (and One to Avoid)

Kevin Dowdy, director of managed care for Meridian Surgical Partners, shares three tactics to improve your chances at successful managed care contract negotiations, and one you should avoid.

1. Know what you want before you begin discussions. The easy part of negotiation is the decision to renegotiate and the subsequent initial contact of the payor. It is best to temper this enthusiasm by first performing the appropriate analysis and setting your goals. Once you know what you want and/or what you will take, then the negotiations can happen more efficiently and effectively.

2. Have all of your tools ready. Similar to "knowing what you want," having your tools ready is key to being prepared. Doing your homework and making sure that you are prepared to answer any question will make the negotiations generate a better outcome. Some of these key tools are things such as case costing, market knowledge, payor's needs, payor's leverage points and any alternatives (i.e., out-of-network or termination). This may sounds simple, but the pushing back from the negotiation table to "look into it" or "better analyze" can result in lost momentum.

3. The absolute best tactic that generates optimal outcomes is to negotiate in person. This may not be cost-effective or practical for all negotiations, but try to make this a priority for the larger payors. Being able to have face-to-face discussions allows for improved discussions and dialogue with the payor representative.

The only tactic to avoid is the "Termination Letter introduction." This always puts the payor on the defensive and can be construed as aggressive. Depending on the payor, this tactic can work for short-terms gains, but most negotiations, similar to investments, should be taken with a long-term benefit focus.

Learn more about Meridian Surgical Partners.

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