Jerri Ivey, director of revenue cycle management at VitalSkin Dermatology, shares steps you can take and ways you can educate yourself in order to negotiate better managed care contracts.
As we discussed earlier this year, revenue pressure can make running a solo practice difficult for many dermatologists. And managed care contracts can create a major impact on a practice’s revenue.
With the ongoing lack of consolidation in the physician space, most practices won’t have the leverage (or often the knowledge) to negotiate with large health insurance companies. As a result, they often sign standard contracts that hinder their practice.
In these cases, dermatologists may not spot things that can put them at risk or cost them money. With terms that set year-over-year reimbursement rates and allow insurance companies to control billing and coding rules, a dermatologist’s revenue increases can be offset by stricter billing/coding rules and increased denial rates.
Fortunately, unlike government contracts, managed care contracts can be negotiated. By taking the right opportunities, understanding the language and avoiding certain pitfalls you can put yourself in a better position to negotiate and get the most out of your agreements. Here are some steps to take (and problems to avoid) that can help you negotiate better managed care contracts.
Steps to Take
Things to Watch Out For
Stay alert for stipulations that let the payer adjust and pay claims at a lower level than submitted.
Be cautious of contracts that can be extended to affiliates.
Keep an eye out for unilateral change authority statements.
Be aware of appeal limitations.
Depending on your size, you may not have the full ability to negotiate with larger companies and payers from the even position you’d prefer. But there are still things you can do, and ways to educate yourself to put yourself in a better position.
The risks from managed care contracts can never be fully avoided, but carefully reviewing everything and identifying potential red flags will help you minimize much of this risk when negotiating.