Beware of These 11 Sneaky Payer Contracting Negotiation Techniques |
Posted: February 2, 2023 |
How effectively do your managed care contracts serve your interests? The use of payer contracts might even be detrimental to you. The main source of income for your practice is payer reimbursements, yet unfavorable contract clauses might cost you thousands of dollars. Many of these unpleasant provisions sneak into contracts because providers regard payer contract negotiation — or renegotiation — to be a difficult and even uncomfortable undertaking. Despite the slight variations among payers, the contracting procedure and the language used in contract agreements are generally the same. You'll find helpful contract negotiating advice for payers below that can help you counteract some of the payers' best-kept tricks for skewed contracts in their favor. Before you sign the contract, you must determine and address these contractual obligations since failing to do so will have a detrimental effect on your practice. Negotiation strategies for payer contracts:Tip 1: Consider Your Options Before Accepting a "Percentage of Medicare" RateIf a payer suggests paying you, for instance, an average of 160 percent of Medicare, proceed with caution. Although that sounds fantastic, they are probably quoting from your charge schedule's 500 or more codes. You might discover that the exact services and procedures are only covered at 90% of Medicare if you look at the codes you report the most. To understand how the contract will impact your practice's overall earnings, you must look at the codes that generate your practice's revenues. Make sure your billed charges exceed your contracted charges (tip 2).Contracts with payers frequently contain language permitting payment of the lower of your billed or contractual amount. Therefore, the payer has the option to pay the lower invoiced fee rather than the one they have agreed to pay if you are invoicing patients at a lower rate than you have agreed to with your payer. Your ability to predict your revenue may suffer as a result. Tip 3: Recognize the Weight of Timeframes.Some contracts include a 30-day filing restriction during the payer contract negotiating process, which means claims must be submitted within 30 days of the service. Payments may be withheld if the paperwork is not submitted by the deadline. This severe restriction can be difficult to adhere to, especially if your clinic is understaffed. If it's not possible to entirely eliminate this kind of restriction, try to negotiate a provision that exempts late submissions in certain circumstances, such personnel changes. Some payers place a deadline on when you can submit an appeal. It's typical for your practice to only have 30 days or less under this provision to find and report payer-related claims processing problems for payment and rectification. Once more, this restriction burdens your practice excessively and may lead to nonpayment for the services you perform. Tip 4: Review and evaluate any hold harmless clauses with care.A keep harmless clause, often known as an indemnification clause, is a typical contract condition. According to this clause, one or both parties agree not to hold the other party liable financially or legally. It may result in a considerable increase in your level of contractual liability and severe financial losses for your practice. Negotiate a clause that divides any culpability between you and the payer. Make a case for how a reciprocal provision more equitably serves the interests of both parties by pointing out the injustices of a one-sided agreement. Tip 5: Look for booby traps in the arbitration clause.A clause requiring arbitration compels your business to undergo this out-of-court procedure to resolve any and all contract disputes. Examine these terms thoroughly because they frequently serve the payer's interests. This is how:
(6) Watch out for the "Evergreen Clause"An evergreen clause in your payer agreement may also permit the payer to automatically renew your contract at the conclusion of each term. Examine this section in great detail and pay close attention to the conditions for terminating the contract. This kind of condition can tie you up in a binding agreement that has an adverse effect on your practice and profitability, particularly when the rates specified in the fee schedule increase over time without being modified. Your disregard for the payer's contract and evergreen clause allows it to renew the arrangement year after year. Tip 7 Observe Restrictive Credentialing and Licensing RequirementsMany payer contracts stipulate that the relationship is immediately terminated if ANY clinician loses their license. This clause should absolutely be negotiated. If one of your practice's eight clinicians loses their license, the remaining seven practitioners can still fulfill their obligations under the contract. Your contract needs to accurately reflect your practitioners' ability to carry out their obligations going forward. Payers frequently demand that you alert them to any inquiries or circumstances that might result in a clinician's license being revoked. With this kind of provision, use caution. Your practice runs the danger of losing a payer without cause if you divulge information prior to any official finding of wrongdoing. Therefore, you should bargain to get this clause removed from the contract. Tip 8: Avoid Using These Payer Contracting Negotiation StrategiesNegotiators frequently pose hypothetical queries to learn more about your mindset. You are not required to respond to these inquiries, which are not actual offers. Just respond to offers of contracts that are legitimate. Additionally, awkward silence frequently occurs while negotiating. Avoid giving in to discomfort; the payer is depending on you to make hasty concessions. 9th recommendation: Avoid Termination UncertaintyThe issue? On what counts as "cause," you and the payer might not agree. Demand that the payer give specific examples of the behavior that resulted in termination. Additionally, you should bargain for a chance to resolve the alleged breach prior to the payer terminating the agreement. If your practice changes and no longer fits into the payer's strategy, the payer may also cancel your contract, unless your contract specifies otherwise. For instance:
You should make sure the contact won't prevent you from making the adjustments you want while remaining in the payer network if you have any upcoming modifications planned (and even if you don't). Tip 10: When negotiating payer contracts, avoid post-termination liability.Once terminated, payer contracts typically call for you to keep serving members until a new provider is assigned to them. Additionally, you could be required by law to appropriately transition patient care, which frequently entails follow-up care and the completion of incomplete medical records. As a result, you must arrange a post-termination reimbursement period that enables you to finish these activities, as failing to do so may subject your practitioners to legal culpability for medical malpractice. It's unlikely that thirty days will be enough time to complete those duties. Because of the gravity of the circumstance, you may need to seek legal advice in order to determine the appropriate post-termination time. Tip 11: Lastly, confirm that the contract terms are accurate.Contracts have a lot of legalese and fine text. Some of these terms ought to be familiar to you at the very least. Spend some time reading each section, word for word. If you need clarification on a specific provision, do some study or speak with an attorney. The majority of professionals advise having a lawyer analyze any deal before you sign it. Don't assume that everything you've bargained for has been included in the contract and put your entire faith in the payer. If you do, you might subsequently discover that the clauses in the contract don't correspond to the terms you first agreed upon. Obtain a copy of the whole contract, along with any addenda, attachments, and exhibits. Make sure that each document appropriately reflects the terms of your agreement by carefully reading it. To obtain a complete revenue cycle management solution for your medical practice, get in touch with medical practise consulting services.
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