'Fatiguing, but ultimately necessary': A physician's playbook for payer negotiations

From the time it requires to the revenue implications it entails, negotiating with insurers is one of the most important, if most challenging, aspects of a physician's practice. For surgeons seeking to boost reimbursement rates or ensure bills and claims are paid out as expected, there are a few factors to keep top of mind, as outlined by three spine surgeons.

1. Understand your market and costs.

Over the past few years, the costs associated with running an independent practice have been steadily rising while reimbursement has been declining. When sitting down with insurers, physicians must know their costs, projected costs as well as the market in which they operate. 

"When negotiating a contract the surgeon must understand their overhead costs. Avoid contracts that do not meet your costs," Praveen Mummaneni, MD, of San Francisco-based UCSF Health, told Becker's. "The cost of doing business in the San Francisco Bay area where I practice is high. Overhead costs for labor and space are driving costs. The contract must compensate for the cost to be worthwhile.

"Furthermore, the surgeon must understand their local market. In your local market, is it important to be a surgeon who sees a large volume of patients or a surgeon who sees fewer patients but spends more time with them? If you choose contracts based on volume but low reimbursement, be prepared to spend less time with patients who then may not choose you as their surgeon."

2. Bring data to the table.

Physician practices armed with data are best equipped to drive the best deal. That data should demonstrate that a physician's practice provides quality care to satisfied patients while containing costs, which helps the payer understand that their members are in the best hands and their margins are protected. Other important factors include defining how long the contract will be, possible reasons for termination, the implications of two payers merging and the time frame for payments.

"Payers are solely interested in price marks and savings. We have been under growing pressure to improve the numerator of the value equation: patient safety, quality of care and patient satisfaction, while parring costs and limiting implant charges," Christian Zimmerman, MD, of Saint Alphonsus Medical Group and SAHS Neuroscience Institute in Boise, Idaho, told Becker's. "Arming oneself with cost per unit case and MedPAR outcome data is simultaneously advantageous. Competing for annual contracts is frustrating and fatiguing, but ultimately necessary."

3. Use a consultant or healthcare attorney.

Health insurance contracts have become increasingly complex and it is challenging for physician practices to secure a good deal without using a consultant or healthcare attorney unless their business manager or administrators are well-versed in the contracts they are negotiating. 

"Utilize a healthcare attorney, go in with a group and be tactful. You will be better off negotiating with an upper hand if you control a large market share. Make sure you have confidence that your attorney can review the contract correctly," Brain Gantwerker, MD, of The Craniospinal Center of Los Angeles, told Becker's. "Inevitably, the payer will at some point not follow the letter of the agreement. It is then, when you have to litigate it, that you will need to know how firm your standing is. I believe if surgeons are not being treated fairly, use of litigation should be strongly and readily considered."

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