Managed Care Contracting is Quickly Becoming a Strategic Priority for Many Healthcare Organizations Nationwide

Physicians and healthcare leaders know the difficulty of maintaining their level of revenue as overhead costs continue to increase and there are ever more demands that physicians “do more with less.”

Medical care prices and overall health spending typically outpace growth in the rest of the economy. However, in recent months, prices for many consumer goods and services have increased faster than usual, with overall inflation reaching a four-decade high in mid-2022.

Managed Care Contracting Strategies Promote Operational and Financial Resilience

In an increasingly volatile marketplace, managed care contracting is quickly becoming a strategic priority for many healthcare organizations nationwide. As such, providers have begun to ask these and other difficult questions:

• Do we want to partner with out-of-market plans to introduce new alternatives?
• Should we reset payer contracts that are no longer workable? If so, how?
• Are we leaving economic value on the table, and if so, what can we do about it?

Organizations must rethink old strategies and devise a managed care contracting strategy that’s responsive to changes in the populations they serve.

Considering Payer Partnerships

When assessing a potential partnership, providers should consider these questions:

• Does the partnership move us closer to the premium dollar?
• Does it enable us to capture a fair share of the value we are creating?
• Does it enable us to grow more proximate to plan members?
• Will we be able to deliver a differentiated experience to plan members?

Communication and Collaboration with Payers

One of the most effective steps organizations can take when negotiating managed care contracts is to foster transparent communication with payers.

The healthier conversations occur when everyone comes together with an open mind and an agreement on the fact that healthcare today is too expensive, and the market demands more affordable solutions and products. Goals of the relationship can include:

• Delivering integrated care and coverage options that combine plan and provider.
• Partnering to reduce total cost of care on a per member and population basis.
• Structuring the relationship to reward desired performance and outcomes.
• Partnering with a regional plan to build a Medicare Advantage (MA) product to counter the strength of certain national payers in the MA market.

Payers Need Providers and Providers Need Payers

The reality is that payers need providers. This is evidenced in terms of what activities payers are pursuing, how they’re vertically integrating with different parts of the provider universe and even acquiring provider assets. Providers also need plans. They need to understand the total cost of the care and the health status of the population they’re serving. They need this information on a real-time basis to make the right decisions.

Managed Care Contracting as a Strategic Priority

Cost containment and operational efficiency have been priorities for quite some time. However, organizations are also increasingly looking for additional ways to promote operational and financial resilience, including a more deliberate managed care strategy.

In years past, managed care contracting has been an important function and competency for provider organizations, but it’s always been at arm’s length from the strategic planning function.

Summary

It can be tempting to put off your managed care contract negotiation responsibilities because working with payers feels like a self-defeating task. After all, insurers are poised to say “no” to every negotiation technique you attempt, and you certainly don’t want to accept the first terms they offer. There are, however, ways to navigate those no’s and come out with contract terms that will allow your practice to prosper.

To thrive in today’s evolving health care landscape, network must be well informed about the governing their relationships. Not only is it critical to understand whether the practice is being reimbursed adequately for services it provides to the payer’s members, it is just as important to be sure the contract language is reciprocal and affords the practice protection over processes, decisions, and changes to the agreement over time, while aligning with its business operation. This is a massive undertaking as physician practices often deal with 40-50 or more different insurance companies with commercial, Medicare, and Medicaid programs as part of each payer’s offerings.

The Physician's Advocate in Payer Contracting

Our roots in payer contracting run deep, making CodeToolz one of the most effective payer contracting and reimbursement firms in the country.

Our Payer Contract Review and Rate Negotiation Services include:

• Comprehensive contract review.
• Contract language analysis to ensure optimal terms for physicians.
• Utilization and payment analysis by payer to compare reimbursements.
• Working with payers to raise reimbursement rates.
• Preparation of competitive fee schedule analysis to support optimal rates.
• Market analysis to present comprehensive proposal to payers.
• Negotiate participation in additional payer plans in any given market.

Once our team has a clear understanding of what your payer contract contains, we identify strengths, weaknesses, and improvement opportunities and review them with you.

Let the experts at CodeToolz take your contracting efforts from burden to competitive advantage. The bottom line is that in negotiations, knowledge is power and planning is essential. Contact Us Today! (512) 787-1852

Schedule a Free Consultation / Demo here.