As a healthcare provider, one of the trickiest and often most overlooked areas of your practice is renegotiating your insurance contracts. Reimbursement rates by insurance companies have gone down steadily year after year. It is getting more difficult and cost-intensive every year to get paid for the same services you have always provided.

Healthcare providers that have been in business for more than 10 years are, typically, being paid the same or less than when they first opened their practice. What profession do you know that you have to train for as many years, stay current on new developments and take on such liability as healthcare providers and then receive no pay raises or increases? Only healthcare, and it is not sustainable.

A few questions you need to ask yourself about your insurance contracts:

1. Do I have the most recent fee schedule for every contract in my office?
2. Am I being paid more today than I was when I first credentialed with insurance carriers?
3. Are all the procedures I perform for patients reimbursable under my current contracts?

My thought is the answers you have to these questions will be somewhat disturbing. Our studies show that less than 3% of healthcare providers have actually negotiated or renegotiated their insurance contracts. The following are some tips to get you started:

Most insurance carriers issue 2-year contracts with healthcare providers. These often are self-renewing and come with nothing more than a letter stating how pleased the insurance company is to extend a renewal of the healthcare provider’s contract.

When receiving your renewal letter or notice, immediately request a complete and revised fee schedule. We are amazed at the number of healthcare providers that simply accept the renewal without reviewing the new rates or details. Some carriers will automatically renew your contract with nothing more than a letter stating such.

You have between 30 and 60 days to review and contact the company with any concerns you have. If they don’t hear from you during this time, the fine print says, “I accept these modified terms.” The terms are often modified and not in your favor.

By digging deeper, most healthcare providers can find a reduction in overall reimbursement for the codes they bill for plus additional requirements put on the provider to get paid.

For example, a procedure you performed more than 500 times last year that did not require prior authorization may, all of a sudden, now require that authorization. This can be a huge detriment to the efficiency of your practice and an additional cost factor you must absorb by allocating staff to perform this now-required function.

We have performed more than 100 reimbursement analyses for practices over the years and find the majority of these practices are being paid less than they were when they first started, with more red tape to cut through just to get paid.

It is the systematic nickel and diming approach that slowly suffocates healthcare providers over the years. Shouldn’t healthcare providers be paid slight increases every contract renewal to at a minimum keep pace with the additional regulations and services they are required to produce?

Sitting in the wings does not serve anyone but the insurance companies. Get on the radar in a positive way. Offer to provide in-service events for your specialty for their members. Get involved with their corporate process by understanding their culture. Offer you, or your staff time at health fairs, health screenings, and other such opportunities.

Insurance companies have cutting edge software and teams of professionals that crunch your numbers and those of other healthcare providers in your field. The approach that you should be paid more because you are a better health care provider simply does not work. You need data to back up your claim.

Why should an insurance carrier pay you more than Dr. Smith down the street? You’ve both been in business the same amount of time. You are both double board certified in your specialty. You both have served the community for many years. All that means absolutely nothing when it comes to asking for more money. The insurance carrier will tell you your reimbursement is standard for your field of expertise. You must put a dollar value to what you do and back it up with data.

You need to produce data that the insurance company cannot ignore. Come prepared with patient outcomes equated in a “dollars and cents” practical nature. Show how your approach to treatment has a better and more cost-effective outcome for the insurance company. Your data should easily illustrate that by performing that surgery, it will significantly cost less than the currently approved treatment plan by the insurance company over time.

Show your dedication through your numbers. How long does it take your office to schedule patients for their members? How long does it take to schedule procedures or surgery for a patient? What is the satisfaction of your patients with your office (support staff and providers)?

An easy-to-use online questionnaire shows commitment to quality assurance and does matter to insurance carriers. Prove your commitment to cost containment. Illustrate through your numbers your proper utilization of ordering labs, testing, and diagnostics. If you perform a lot of surgery and/or procedures, track the patient’s outcomes and use this data to your advantage. Explain, in a dollars and cents methodology, how performing a higher-end, more costly surgery now can reduce costs later.

You can easily do this by tracking your clinical data showing reduced utilization of required follow-up visits, reduction in peripheral items such as reduced physical therapy costs, and showing how, if the insurance carrier pays you now, the patient can avoid more costly forms of treatment later.

These numbers can be produced and presented in a professional and effective manner with the right software program and expertise to put it in a powerfully succinct presentation.

This is no different than when an employee comes to you for a raise. Are you going to give that employee a significant raise just because? Of course not! If they came to you well prepared with reasons and supporting documentation as to why you should give them a significant raise, you would be far more likely to do it.

This commitment to understanding the business side of your reimbursement will pay immense dividends, especially when considering it is magnified over time. A pay increase of just 5% on your most frequently billed codes can yield tens of thousands of dollars over time.

The fear of repercussion often paralyzes many healthcare providers. I’ve heard horror stories of physicians losing their entire contract because they asked for more money. This goes against common sense. The carriers expect and are pleasantly surprised when you do not come asking for more money. This negotiation is like many other things in life, you must have good relationships.

Insurance companies are run by people and developing those relationships is key to unlocking more money. You should view the insurance company as your ally, not your adversary.

When sitting down at the table to negotiate, be prepared. Understand your numbers. Show your commitment to quality and cost savings. Get across your appreciation for the carrier’s commitment to the same principles you have. By bringing the discussion to this level, you automatically set yourself apart from the majority of the healthcare providers in the marketplace.

Do not demand a raise, but instead offer consistent and powerful data that supports them seeing you as a valuable asset in the delivery of healthcare to their members, while always having your eye on costs. It is then that a reasonable pay increase should be asked for.

Asking for an increase to your current fee schedule is not the only way you can earn more money. Many carriers are open to more unique approaches in rewarding physicians such as bonuses for production, cost management and adherence to diagnostic and testing procedures. Ask to participate in these programs as well as suggest some of your own.