5 Steps to Get Payer Contract Renegotiations Rolling & Improve Practice Revenue, Part I

Posted on 22 Jan, 2018 |comments_icon 0|By Elizabeth

When it comes to getting higher reimbursement rates from payers, “you have far more leverage than you think,” says Penny Noyes, president, CEO, and founder of Health Business Navigators.

Payers need us more than we need them. The fact to remember is: we have leverage and we need to use it.

While payer contract renegotiations involve a tedious and often discouraging process, they can pay off in big dividends—dividends that are essential to your practice’s bottom line.

So, let’s get started! Do you know what your fee schedules are for your largest payer or network? Do you know when they were last changed? What about how to find negotiation terms in your contract?

Don’t panic if you can’t answer these questions. The typical practice is tasked with pinning down the answers. Your first job is the prep work.

  1. Get your contracts and agreements together for all payers.

The first step is gathering up all your contracts, and you should start immediately. “You can expect it to take two months to gather the required info, if you’re diligent, and a year to complete your first few renegotiations,” Noyes cautioned attendees at MGMA’s 2017 Financial Management Payer Contracting (FMPC) conference. Your payer contracts/fee schedules fall into several groups:

  • Commercial (BCBS, Aetna, Cigna, etc.)
  • Government (Medicare, Medicaid, Tricare)
  • Government Replacement (Medicare Advantage Organizations, Medicaid Managed Care Organizations)
  • Workers Comp
  • Networks (rented by payers, such as Multiplan, TPRN)

Ensure that the versions you have are both current and fully executed, meaning that they have been signed by the practice and the payer. Make sure you have any addenda and amendments between the contract’s effective date and the current date.

But if you can’t find your contracts, don’t worry. You can request copies from your payer or network. Each payer, however, has its own protocol for requesting fee schedules and contracts. You may need to contact your payers for request guidelines.

  1. Figure out your fee schedules for all your codes.

You won’t find your fee schedules in your contracts. Payers aren’t in the business of broadcasting their fee schedules. In fact, you could say they’re in the business of guarding them. Noyce points out, “Payers have all sorts of ways to make code rates difficult to get: special fax and email requests, web portals that provide only a handful of codes at a time, or vague contract exhibits referring to undefined standard market schedules.” In other words, payers are banking on the tedious nature of the renegotiations process, hoping you’ll accept their terms, no questions asked.

Noyes advises gathering up the codes that you use and developing a spreadsheet for all your codes with modifiers and places of service for each payer product. Send this to your payer representative to populate for you. Occasionally, your rep will comply, but more often he or she will either send back a full list of codes for you to search or direct you to a portal.

“Do whatever the rep tells you to do. Go to the portal, send the fax or email, but get the rates for everything you do,” Noyes advises. “Don’t accept that they’ll send you just a handful or the top ten codes. Make sure you get all of them.”

Look at the entire schedule—this is important. At her firm, Noyes looks at all the codes’ rates, and then compares entire schedules to weight them by utilization over a year (because some codes are seasonal, like allergies). She then compares schedules to the Medicare rate. Next comes the math. “Multiply fees by your utilization rate, and then by your payers—asking yourself, ‘what if each of these payers had all my business?’—and weight it by each code. It’s the only way to get an apples-to-apples comparison of fees.”

Stay Tuned

Don’t forget to visit for Part II in this series: 5 Steps to Get Payer Contract Renegotiations Rolling & Improve Practice Revenue.

Learn More

When it comes to contract negotiations, you can’t afford to go it alone. Team up with the TCI experts and get the revenue you deserve in your provider contracting with the Secrets of Successful Provider Contracting.

Also by TCI, Financial Intelligence for Physician Practices will arm you with financial planning processes and tools to capture the profits you deserve.



Elizabeth works on an array of projects at TCI, researching and writing about modern reimbursement challenges. Since joining TCI in 2017, she has also covered the nuts and bolts of cybersecurity, compliance with federal laws, and how to tap into the advantages of telehealth services.

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