Learn what kinds of questions you and your medical practice team should be asking when negotiating insurance contracts

Negotiating payer contracts can be daunting for physicians, and it can feel like an uphill battle against the insurance company behemoth. Nevertheless, the terms of these contracts can significantly affect a medical practice both from a financial and legal perspective. Below I have described six different questions that practice leaders should be asking before they sign on the dotted line.

Who should be involved in negotiations?

The contract the insurance company or “payer” puts in front of you will require that you understand your practice’s operations and finances—including billing and coding processes. It will also require that you know a bit about compliance. The relationship you have with your insurance carriers can and will affect the way that you deliver care, and you should think about your obligations both in terms of the efficient operation of your healthcare practice, and in terms of your commitment to provide high quality patient care. I recommend that you include the medical director, office manager, coding and billing department or staff member, and a healthcare attorney in discussions related to negotiating insurance contracts.

How do I negotiate the fee schedule?

First, make sure that you understand the fee schedule. Is it transparent and complete? Accessible when you want to review it? Second, determine whether you really want to expend the time and resources on the difficult task of fee negotiation. Run a report using the codes for services you most often bill for, and determine whether the fees make sense for you. If they are comparable with your other payers, then you may want to hold on negotiations until your next renewal, when you may have a better relationship with the payer. (Note: If your fee schedule is flat for the initial term or the contract, you’ll want to make sure that your initial term isn’t too long.) Third, do you have any leverage you can use to entice the payer to offer fee schedule improvements? If you’re a provider serving a large number of that payer’s beneficiaries, or you’re providing a very unique or sought after service, or the payer is relatively new in your area, you may have some leverage. Make sure you are able to demonstrate your value during the negotiation. Use data if possible.

How can I guarantee that I will get paid timely?

I have never seen a payer contract with such a guarantee. However, practices can make sure there is clear language in the contract describing the obligation of the payer to pay timely. The contract should explicitly state the time period within which you can expect payment on “clean claims”—that is, claims that have been properly billed.  If you’re feeling bold, you may request that the payer agree to payment of interest on overdue payments. Practices should also be wary of retroactive denial of claims provisions. You don’t want to make it easy for the payer to claw back payments made to your practice if you have submitted them timely and correctly.

What can I expect from the credentialing process?

Credentialing and re-credentialing can be a time and resource intensive process, and delays in getting new clinicians on the payer panel can have significant impact on your operations. If it is not clear in the payer contract, ask whether there are standardized processes that enable an expedited time line. A payer should be able to complete the process within 90 days if the requirement documentation is provided, and you may want to hold them to that in the language of the contract.

What kind of administrative burden can I expect?

Insurance carriers implement a number of protocols to control utilization, including specific policies and procedures for referrals to specialists, billing and coding, prior authorizations, and payer audits. The payer contract should define its expectations of your practice related to these protocols. You (and your team) will want to determine whether these seem overly burdensome or unnecessary. Key provisions to look out for: time period and process for submitting claims (sometimes called “timely filing”), nonstandard billing and coding requirements, and “utilization management” activities that require the cooperation of the practice.

Can I get out of the contract if/when I want to?

For the benefit of both the provider and the payer, most insurance contracts have multiyear terms. This saves both parties from having to renegotiate year over year. (Note: It is not always ideal for the provider to have a multi-year term.) Most contracts also have a “termination without cause” provision, to allow practices to get out of contracts during the initial term. However, the notice requirements on these termination provisions can be as long as 6 months or a year. Therefore, you want to make sure you’re being diligent in your decision to sign a contract with each payer, and, if you can, negotiate a shorter notice period for termination without cause. Three months is reasonable. If you do choose a multi-year term, it is also advisable to negotiate an accelerator clause, which will increase the fee schedule year over year by a predetermined amount.