Negotiating with Health Care Payers Clinicians and business owners can have successful contracting relationships with payers, but first they must prepare to negotiate the best deal. Good preparation for negotiating includes gathering publicly available average charge data, knowing your practice and operating costs, knowing how to track reimbursement patterns, knowing standard billing codes, and understanding ... In Private Practice
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In Private Practice  |   October 01, 2007
Negotiating with Health Care Payers
Author Notes
  • Janet McCarty, private health plans advisor, can be reached at jmccarty@asha.org.
    Janet McCarty, private health plans advisor, can be reached at jmccarty@asha.org.×
  • Steven White, director of health care economics and advocacy, can be reached at swhite@asha.org.
    Steven White, director of health care economics and advocacy, can be reached at swhite@asha.org.×
Article Information
Practice Management / Professional Issues & Training / In Private Practice
In Private Practice   |   October 01, 2007
Negotiating with Health Care Payers
The ASHA Leader, October 2007, Vol. 12, 26. doi:10.1044/leader.IPP.12142007.26
The ASHA Leader, October 2007, Vol. 12, 26. doi:10.1044/leader.IPP.12142007.26
Clinicians and business owners can have successful contracting relationships with payers, but first they must prepare to negotiate the best deal. Good preparation for negotiating includes gathering publicly available average charge data, knowing your practice and operating costs, knowing how to track reimbursement patterns, knowing standard billing codes, and understanding negotiating strategies. Whether initiating a new contract or negotiating for improved rates, the right data and polished bargaining skills will yield solid business results.
In his book, Bargaining For Advantage, G. Richard Shell lists six factors for effective negotiation. These factors can be adapted for speech-language pathologists and audiologists considering negotiation with a private health plan:
  • Understand your bargaining style

  • Set effective goals

  • Have a reasoned argument supported by applicable standards that is within the other party’s capability

  • Consider relationship factors such as trust and reliability

  • Know the other party’s interests

  • Evaluate your leverage

Effective negotiators are able to see the world from the other party’s point of view. After identifying the payer’s appropriate decision-maker (usually not the medical director), look for common ground. Reverse roles during your preparation and anticipate why the other party might say “no.” Health plans need to provide coverage for a comprehensive array of services, including speech-language, swallowing, hearing, and balance services. You can offer the service, and in return you expect fair and equitable reimbursement. Be prepared to ask a lot of questions so that you can assess the other person’s bargaining aptitude and gain valuable information about the issues facing the health plan for the negotiating process.
Goals set the upper limit of what you will ask for and helps to motivate people. Write down your goal and discuss it with someone else first. The goal should be justifiable and obtainable. Goals should be supported by authoritative standards and norms and should be viewed by the other party as legitimate. Use the Medicare Physician Fee Schedule for gauging public-program coverage and payment rates, and other available charge data for higher, targeted values. Anticipate the arguments the other side will make and prepare a counter-response. If necessary, consider first making your arguments before a sympathetic audience (a provider relations representative who will support your goals) before making a pitch to the decision-maker.
Gain access and credibility through relationship networks. Do colleagues in physical medicine have a good working relationship with a health care plan? Create a level of trust and confidence by both providing and expecting it. When other parties treat you unfairly, let them know about it.
The last component to consider in negotiating is leverage. Which side has the most to lose from no deal? You offer a service that beneficiaries want and need—but will a colleague outbid you? What is the level of consumer demand in your area? ASHA member Katrina Zeit notes it is “essential that consumers who value speech, language, and hearing services voice their expectation that these services should be covered.” Zeit, president of the Ohio Speech-Language-Hearing Association, shares with employers and health insurance plans a DVD she helped produce that showcases consumers providing testimonials about the value of speech and hearing services.
ASHA has a private health plan lobbying network—State Advocates for Reimbursement (STAR). The STAR network has a member in nearly every state (including Zeit in Ohio). If the negotiations could be a statewide issue, contact your STAR member for assistance.
Resources

Medicare Physician Fee Schedule

Calculating fees

Fees: Finding Success” [PDF] Data from ASHA’s Negotiating Health Care Contracts & Calculating Fees (The Milliman fee data found in this product cannot be directly shared beyond ASHA members, but can be used as a reference for negotiating rates).

National Fee Analyzer

STAR Network

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FROM THIS ISSUE
October 2007
Volume 12, Issue 14