In our previous three posts of this series, we showed you how to evaluate a payer contract opportunity, prepare for the actual negotiation,and evaluate an existing opportunity. In this post, we’ll look at how to renegotiate for a better rate.
Payer contract renegotiations are a lot like football. You need a good offense and defense, depending on who has possession of the ball (initiating the process).
If you want to start off on offense, look at when your contract automatically renews. Usually, there is an opportunity to renegotiate rates within 60-90 days of that renewal date. That’s your window of opportunity to scramble for a better rate – especially, if your rate hasn’t increased for several years.
If the payer contract is kicking off the renegotiations, you’ll want to stand your ground. First, verify they are actually in the correct notice period. You don’t want to be pressured into a less desirable rate while your current contract is still valid. Secondly, make sure you’re negotiating with the correct person – someone who actually has the power to approve a negotiated rate. Most importantly, never take their first rate offer. Now, that you’ve done your homework of evaluating an existing opportunity, you can counter for a rate that more accurately reflects your actual cost per visit and/or the administrative burden they place on your practice.
Be patient while waiting for a counter offer. If they don’t come back with a desirable rate, remember you can always take your ball and go home. Ultimately, that may be your best defensive play to protect your business.