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Payer contracting: Learn effective ways to tip the scales in favor of your practice


Looking for ways to reverse your dermatology practice's declining reimbursements, but don't know where to start? Try going to the source, or rather, sources - the terms of your payer contracts, that is. This article suggests some key items to seek in your next contract.

Key Points

Balance billing

Put the onus on the patient. Seek a contract clause spelling out when you will be allowed to balance bill the patient.

Timely filing

Get exemptions to timely filing deadlines. Dermatology practices lose thousands of dollars each year by missing timely filing deadlines when patients provide the wrong insurance information at their visit. A patient who provides inaccurate coverage information sends your staff off to chase down reimbursement from the wrong payer. When you eventually get the correct information - after a series of denials from the wrong payer and several weeks trying to communicate with the patient - the correct payer may deny your claim because it has now gone past its timely filing deadline. Thus, you are forced to write off that claim.

To avoid this cat-and-mouse game - one in which you're always the loser - ask payers to waive their timely filing deadlines if the patient (their beneficiary) provides inaccurate coverage information.

Support your negotiating stance by agreeing to provide the payer with written proof that you filed the original claim in a timely manner to the health plan the patient claimed to have.


Focus on fees. Instead of seeking an across-the-board fee increase, focus on getting better payment for the CPT codes you use most often.

Before you sit down to negotiate the contract, run a report to determine your practice's top codes based on revenue. Commence contract discussions by requesting an increase in just those codes. It might just work.

Payers deal with more than 7,000 CPT codes, so from their perspective, increasing the allowable for less than 100 codes to one dermatology practice might seem like a minor concession.


Require alerts. Payers make frequent adjustments to fee schedules. Ask for a clause in your next contract that requires the payer to alert you in writing 60 days prior to making any changes in the fee schedule.

Also, ask that fee schedule changes be treated as a termination of the contract unless both parties agree otherwise in writing (see the termination clause suggestion below). If they fail to alert you, the contract should specify that you are due the difference between the original fee schedule and the lower one that they substituted without notice, plus interest.


Define key terms. Review the contract for imprecise terms such as medical "necessity," "clean" claim, "prompt" payment and "reasonable" notice. The payer has an incentive to keep these terms vague and interpret them as it pleases.

Head off lengthy and disruptive appeals by offering to agree to definitions of key terms. Refer directly in the contract to your state's laws when applicable. Many states now define critical contract terms; however, payers that do business in many states may not be aware of your state's laws.

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