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When Do Insurers Negotiate Contracts with Healthcare Providers?

How comfortable do you feel with your current provider agreement with your commercial payors? If the answer is anything less than completely satisfied, then you may need to consider negotiating with your commercial payor(s).

Health care providers are getting bolder about asking to renegotiate their provider agreements, but it can still be hard to know the right time and place to get involved. If you are unhappy with your contract, but are unsure on how to negotiate, consider hiring an experienced health care provider attorney to help you take back your power.

Bryant Legal Group specializes in helping healthcare providers fight back against unfair insurance policies, dispute resolution provisions, and fee schedules. We understand the hardships providers experience and fight on your behalf so you can focus on helping your patients.

In this article, we will cover how and when to negotiate your contract, tips for negotiating, value-based reimbursement models, and how to keep your practice free from litigation restrictions.

How and When Health Care Providers Should Negotiate Their Contracts

Circumstances and timing can be crucial when renegotiating your provider agreements. It is important to consider the insurance company’s perspective and goals, but you also need a strong understanding of your own practice’s value and position in your region.

Timing your negotiations correctly and going in with a solid game plan can give you the upper hand at the negotiating table and lead to a much higher chance of success.

Is the time right for you? Here are a few things to consider.

Scarcity of Health Care Services

If your practice is located in an area with very few other health care providers, then you can, and should, use this to your advantage. An insurance company will want to work with you so they can get a foothold in your area—but without access to your practice, they don’t have a way in. This makes your position much stronger and provides you with an excellent opportunity to negotiate.

Unique Specialty Value

Are there many other practices that do what you do in your area? If not, you will still be an important commodity to an insurance company even if there are plenty of general primary care options around. Insurance companies can make more money from specialists, which means you have more power and opportunities to negotiate if you are one of the few.

Mutual Business Interests

Consider the direction the insurance company is headed. By keeping a close eye on business news for the insurance company, you can understand where your interests align. For example, if the insurance company is looking to pursue other practices in your area, they may rely on you for references. They may also seek you out if you regularly see any organizations they are keen on working with. Use these scenarios to your advantage and build a contract that is mutually beneficial.

Tips for Negotiating with Health Plan Providers

When you’re about to go to the negotiating table, anything you can use to your advantage could end up saving your practice some serious headaches. The insurance company may try to take advantage of you, but by using these tips, you can increase your chances of success and negotiate with confidence.

  • Do your research: Before entering negotiations, make sure to read up on the insurance company itself. Consider its future plans and business interests to see if you align. Also, contacting a primary care physician inside the health plan’s network can give you an idea of what it is like to work with them as a preferred provider organization compared to out of network providers.
  • Know your worth: Understand where your value comes into play when negotiating contracts. There is a reason why this insurance company wants to do business with your practice—don’t forget that.
  • Be willing to accept financial risk: By being flexible on risk, health care providers can give themselves an edge. Consider remaining flexible on reimbursement models to gain more leeway elsewhere.
  • Don’t be afraid to walk away: If negotiations start going south, don’t be afraid to walk away. Settling on a contract that isn’t mutually beneficial will never help you in the long-term, even if it seems like a short-term solution. If you are considering walking away, be sure to consider whether there are state or federal laws that impact how you may be reimbursed or treated as an out of network provider by the insurance company.
  • Hire an experienced health care attorney: By hiring an experienced health care attorney, you can remove the burden of negotiation from your plate. You spend every day helping others; let a professional help you get what you deserve.

Using these tips can help to reduce your stress and increase your chances of success when negotiating your health plan contract. Make sure to keep your practice’s best interests in mind and don’t agree to a contract that places your needs last.


Health Plans and Value-Based Reimbursement Models

An easy way to gain flexibility in your contract negotiations is by agreeing to accept some financial risk through a value-based reimbursement model rather than a fee-for-service model.

A value-based service model is centered around reimbursement based on quality of work rather than quantity. This model puts the pressure on health care providers to track patient outcomes and satisfaction, as these are used as the measures of success for their reimbursement and health insurance premiums.

Although this model has been shown to improve patient experience and reduce overcharging, it does place a great deal of work and risk upon health care providers. Without a guaranteed flat fee, reimbursement becomes somewhat subjective based on patient perspective and recorded metrics. This means more work for health care professionals and less for the insurance company.

By accepting this risk, however, you can gain an edge in your negotiations and appeal to the insurance company in the process. Although this may not be the right choice for all providers, it can offer some flexibility for those who are willing to take the chance.

Arbitration vs the Right to Litigate

When health care insurers negotiate contracts with healthcare providers, the insurance company will usually include a section known as arbitration provisions. The purpose of these provisions is to ensure that health care providers must use the insurance company’s arbitrator in cases of legal dispute, rather than handling litigation how they see fit.

There are a few issues with this system, which makes reading and adjusting these provisions to fit your practice’s needs very important during negotiations. Some common issues arbitration causes for health care providers include:

  • High costs: Arbitrators, in this case, will be chosen by the insurance company. Arbitration can be costly and can lead to serious financial hardship for smaller providers.
  • Lack of representation: When insurance companies hire an arbitrator, they are ultimately there to represent the company’s interests, not the provider. Providers are not given the option to choose their own representative and are often not involved in the process until after a decision is made on their behalf.
  • Binding decisions: Once a decision has been reached through arbitration, those decisions are almost always binding. This means that providers will not have a chance to appeal if they don’t agree with the decision and can end up in a bad situation.

Overall, it is important to establish your right to litigation during negotiation. Being able to represent your best interests in a legal dispute is extremely important, and hiring an experienced health care attorney can save you from being stuck with your insurance company’s unfair decision.

Bryant Legal Group: Chicago’s Premier Attorney for Healthcare Providers

If you are considering negotiating your health plan contract, don’t do it alone. At Bryant Legal Group, we have the expertise to help you get the most out of your health plan contracts and can help you negotiate a contract that works for your practice’s needs.

We know the tactics the insurance company use to get the advantage when negotiating your health insurance policy, and are here to help you take back the upper hand. If you or a colleague are interested in renegotiating your health insurance policy and are in need of legal assistance, call Bryant Legal Group at (312) 561-3010 or contact us today to schedule your free consultation.