insurance negotiation

I believe my first series of blog posts years ago were specifically about insurance negotiation tactics.  It's been a while, and John Canning sent me this link to share.  Although it's a bit sp[censored], I can certainly confirm that I've seen the insurance companies use every one of these tools.

Quick read, a good reminder.

Over on PartnerTalk (the PCC user mailing list), one of our clients mentioned trying to get UHC to the table three times and failing.  I pointed out that the insurance companies have no motivation to pay attention to a small pediatric practice until you force them to do so - namely, by dropping them.

Yet another unscripted example of a client successfully fighting the managed care companies for a better fee schedule.  Verbatim:

The very first blog I ever wrote was about one client's fight with an HMO.  Now, more than two years later, I continue the battle.  Look at this funny message I received today, edited for brevity and privacy:

I'm busy writing another piece for the SOAPM newsletter and it's really taking up my time. I'm truly honored to be given the opportunity to provide them comment but, whew, it takes a lot of work. That is, it's one thing to ramble on in a blog (this is a good example), but it's a different thing entirely to actually construct a 500-1000 word piece that really needs to be articulate, concise, and compelling. It's certainly a good exercise.

Oh, back to the topic: I know three different offices in different states in the northeast who have recently renegotiated their Aetna contracts with considerable success. It's enough of a convergence that I find it worth mentioning - perhaps it's a good time to give your rep a call. Aetna is on the upswing, take advantage. Negotiating now? Push harder. Considering a conversation? Do it now.

I've ranted about how "getting big" is not an automatic recipe for success when negotiating with insurance companies. It's rare, in my experience, that the cost of merging offices is outweighed on the contract end.
Here's an email I got just before the weekend. This isn't a 15-20-40-80 doctor practice. This isn't the only pediatric office in town. This is a 5-provider group in the northeast with probably more pediatricians per-square mile than anywhere else in the country.

Over the last month, I have had three practices ask me about multi-year contracts.  What do I think of them?

Multi-year contracts can be great.  Why not?  It's one less contract to worry about for 2-3 years.  Presuming you do it properly, of course.  Sometimes, the payors are willing to give price increases over time that you could never get going year-to-year.  In addition to all of the normal contracting issues to consider, here is my general advice when a multi-year contract is on the table:

• Whatever rate you are paid for your multi-year contract should increase each year.  100% -> 110% -> 120% of Medicare, etc.  Obviously, it's more money.  And, obviously, it reflects an expected cost-of-living increase.  But it also means that the starting point in your negotiations 3y from now is higher.  And it's a matter of principle.
• Lock in your RVU year.  In the past quarter I have seen more contracts that talk about the "prevailing CMS rates" than in the previous two years.  Why?  Because all the payors know that Medicare rates are going to get cut.  In fact, as I've pointed out here, depending on your "gypsy," you may already be getting a sizable cut.  So, the smart payors tie you the most recent year because they expect that it will cut their reimbursement 10-20% in the years to come.  So, lock your contract to, say, 2006 or 2007.
• Finally, take this chance to make sure the payor refers to RVUs, etc., and not the "Medicare rates" - the latter language gives them freedom to use the Budget Neutrality adjusters, which are an additional ~5% cut.

I took another “We Think We Need To Merge!” call today from a thoughtful practice on the east coast. A couple small groups, aimed at getting a more fair piece of the pie. Can’t say I blame their intent.

Paraphrased from a customer message on our client-only mailing list today:

I was wondering what you think of Coventry Health/Health First. I guess they have replaced old Health Care Value Management. We have been noticing that since Coventry has replaced HCVM their reimbursement has been ridiculously low… I called him and complained. Someone called back today and asked, “Why should we increase our rates if you don’t ask us to?” Anyway they are open to negotiating the rates and are offering me XXX% of the Medicare fee schedule. What do you all think?