Practice Management Alert

Question: When we’re negotiating rates with our payers, it seems like they object to all of our requests. What can we do to get past their objections?

New Mexico subscriber

Answer: According to Penny Noyes, president, CEO and founder of Health Business Navigators in Bowling Green, Kentucky, providers can expect a version of the following objections:

• “Due to reform, we are not able to entertain any rate increases at this time. (Subtext: Our CEO needs to continue her $24mil base salary and if we give you an increase, she won’t meet her bonus goals.)”
• “You are asking for a 23% increase all at one time—we can’t do that. It’s not our fault that you haven’t complained about our rates the last ten years as we kept lowering your rates.”
• “We cannot provide an increase at this time, but we can consider your eligibility for our P4P program that pays a pittance and will be paid a year and a half after the period for which you are being reviewed.”
• “You are at market schedule and other providers accept these rates. They haven’t evaluated their contract either.”
• “The Reimbursement Committee met this afternoon and they did not approve your final counter proposal. I know this is not the outcome you were hoping for, however the Committee determined that our last offer was above the market standard fee schedule.”

Try using the following script as a guideline when payers object:

“We appreciate your presenting our reasonable offer to your reimbursement committee to which you have denied us direct access to discuss the reimbursement. We are not privy to what you pay others in the market and do not find their acceptance of your substandard rates to be a valid argument. If they want to do business at a loss, they can. We have advised you of the specialty surgical procedures that we perform in an office setting that save your plan tens of thousands each year. No other provider for 70 miles is trained to perform these lifesaving procedures. It is too bad that your members will not have access to these services as of (date) – after the termination of our contract.” 

Noyes advised one of her clients to send this response to a payer when they refused to increase their rates:

“While we appreciate that you notified us that your company has ‘decided to continue the relationship with ABC under the existing reimbursement terms,’ you have failed to recognize the termination notice that is on the table. Since you have made the decision not to negotiate in good faith, please advise us when you will drop letters to your insured members so that we can anticipate the call volume and advise your members, our patients, what their options are after our termination.”