The one trick to negotiating reimbursement rates

Last I checked my plumber charges me more than some physicians make for some services. It’s not to say that plumbers don’t work hard, but they certainly didn’t have to invest an inordinate amount of time and money to get specialized degrees. What happened within the last few years and, more importantly, what can you do?

The change in reimbursement has been quite dramatic. As someone who has negotiated hundreds of contracts, I’ve seen some shockingly low reimbursement rates from some of the payors. The fundamental reason that commercial reimbursement is constantly cut is because these organizations are often for-profit and publicly traded companies with stockholders that require consistent positive financial performance year-after-year. All of this is done at the expense of physicians.

What can a physician do? It may be time to negotiate your reimbursement rates.

Negotiating your reimbursement can be tough; you might think that the insurance company has all the negotiating power - but you might be surprised. Every practice that I’ve worked with has at least a handful of advantages to negotiating their contract.

One physician I knew was getting remarkably low reimbursement from one particular insurance company. After asking his provider representative for an increase, he was quickly denied - even though he was the only specialist in the area.

After I took the information and presented our argument in a way that the insurance company would respond, he was able to get a rate that was higher than what the other payors were reimbursing for the same services. This meant thousands of dollars to his bottom line.

The trick was to creatively craft the argument in a way that the insurance company would understand. After we had strategically conveyed the rationale behind the increase request, the insurance company couldn’t say no.

After negotiating as many contracts as I have, I’ve found that there a few simple strategies that work in your favor and can result in a favorable negotiation.

Nathaniel Arana is nationally recognized healthcare business consultant with experience ranging across many different specialties. He is a physician advocate and has helped practices become more profitable by allowing his clients to focus on patient care by helping get rid of the business headaches. You can subscribe to his newsletter here. You can email Nathaniel at nathaniel@ngahealthcare.com or check out www.ngahealthcare.com.