The Importance of Your Anesthesia Practice’s Payer Contract Negotiations
Part 3 of our Anesthesia Billing Revenue Cycle Health Series
In the final part of our series focused on Revenue Cycle Health, we’ll explore the importance of annual payer contract negotiations in your anesthesia practice.
It’s no surprise that the No Surprises Act has made it more difficult to negotiate with payers, in some instances, payers will not even engage in negotiations and have simply denied requests for contracts from anesthesia groups. So, what’s an anesthesia group to do to motivate payers to negotiate in good faith and keep with rising costs? We’ve outlined some steps below that have proven successful when negotiating increases on behalf of our clients.
Demonstrate your value with data: It’s difficult for an anesthesia practice to differentiate themselves since most interactions with a patient occur on the day of surgery which is why it’s important to arm yourself with data.
- Perform an analysis of your contracted rates to determine the average and then use that identified information in your negotiations if your current rate falls below the average.
- Your practice likely performs post-op pain management services at the request of the surgeon, use that data to demonstrate the services you are providing to patients to help manage pain and provide a better patient experience.
- How many sites does your group provide anesthesia services to? Use case volumes by site and procedure category to demonstrate the depth of services you are providing in your community.
Engage your facility leadership: Before commencing negotiations, be sure to have a conversation with your hospital and/or ASC leadership and ask for their support. Using statements in your request for an increase, such as “our CFO, John Doe, agrees we provide exemplary service” are always a plus.
Develop a relationship with your provider representative: If you have a dedicated representative that you deal with regarding provider enrollment or payment issues, stay in contact with that person. It may seem cliché but if you reach out to them directly with a personal email every now and then, as simple as wishing them Happy Holidays, that will work to your benefit instead of only reaching out when you want something.
Escalators: Not every payer is on board with this, but it doesn’t hurt to ask. You need to be mindful of how you present your request for an increase. For example, in your kick-off letter you could add something like this: “I know how busy you are so what if we make this amendment for a three-year period with annual increases totaling 5% over the three-year period instead”.
Don’t’ neglect flat fees: This is another area often forgotten since groups tend to focus on an increase to the conversion factor only. Be sure to have a spreadsheet with flat fee codes and apply the same increase to those procedures if they are carved out in your contract.
Don’t let an opportunity to negotiate pass: Sadly, many of the new clients we have onboarded have not had an increase or movement on their contracts in well over five years. Most payer contracts have an effective date and then renew annually unless terminated. Be sure to mark that renewal date down and begin negotiations 90 days prior. Failing to request increases annually (unless you have escalators) sends a message of complacency with your current rate.
Make it a joint effort: As a billing and practice management company, we review payer contracts for clients annually, however, your billing company cannot lead this discussion alone or perform this task on your behalf. Our Client Experience team provides data, support at the table and tracks renewal dates, etc., however, the discussion must be led by your group. The contract is between you and the payer, not the billing company, so it is important for the group to take an active role in the negotiation and present a united front with your billing company.
By Jeanette Mini, Vice President – Fusion Anesthesia Solutions