Most emergency medicine (EM) providers know the unsettling feeling of completing contract negotiations with a payer, wondering whether the deal they just inked was a good one or if they left money on the table.
Payer-provider contracts are essential for ensuring that EM providers receive timely, appropriate reimbursement for their services, while also ensuring that patients receive the care they need. Payer contracts cover reimbursement rates, medical necessity, credentialing, prior authorization, and more. To reach agreement with favorable terms, it is important for providers to do their homework on their own performance in these areas, as well as on the competition, before sitting down with payers.
Payers Leverage Proprietary Intelligence To Strengthen Negotiating Power
Unfortunately, providers enter contract negotiations at a disadvantage. Payers have deep insight into services provided by competitors within a market, and they use this information to create disproportionate leverage. Conversely, providers cannot see into payers’ “black box” and are prohibited by anti-trust rules from exchanging information about contracted rates with other providers. As a result, they enter negotiations with little to no information about how they stack up against the competition or what fair reimbursement looks like in their market. While there are experts whom providers can hire to provide insight and help them develop their negotiation strategy, these resources are out of reach for most providers unless they are part of a larger healthcare system that will pick up the bill.
If providers want to prevail in negotiations with payers and emerge with a favorable contract, they cannot walk in cold. They must arm themselves with solid data about their own practice, as well as intelligence about the rates and terms market competitors are getting from payers.
Unprecedented Access to Claims Data Is Turning the Tables
Until recently, providers could not obtain information about their competitors, their market, or payer behavior. Today, a game-changing data service like ZOLL® Claims Clarity will scour and normalize billions of actual healthcare claims and remits to deliver market intelligence on charges, payments, and denials by specialty and sub-specialty.
Access to healthcare claims and remits data gives providers renewed negotiating power. With visibility into the payments by, for example, a single CPT code or their entire book of business, providers can begin to recognize patterns in payer behavior that can help them negotiate smarter during contract talks. Understanding how the payer will behave once the provider is under contract and in network allows the provider to anticipate and mitigate contractual language that would put them at a disadvantage. For example, instead of negotiating the rate alone for a service, they also can lobby to include language that the payer will limit denials to a certain percentage or agree to waive prior authorizations on a standard procedure.
Tips for Providers Preparing to Negotiate Payer Contracts
First and foremost, providers must prepare for payer negotiations well in advance. To set themselves up for success, they should:
- Evaluate what they bring to the table
- Articulate what differentiates them in the market
- Know their payer mix, including fee schedules and how payers compare to one another
- Establish their opening position, including contract term, language, rates, etc.
- Determine which details are negotiable and which are not
- Support their position with data from their practice and on the competition
Once the provider has gathered all the data about their practice, they will need to shop for a market intelligence resource to provide additional information.
Capabilities To Look for in a Healthcare Market Intelligence Product
There are competing market intelligence products and services available, and providers should examine them closely to determine which ones can provide the true market transparency and accuracy they require. For example, providers should ask whether the data is drawn specifically from healthcare claims or includes unactionable information, such as dental or pet insurance claims. Is the data sourced from what payers have released, or is it extracted from a high volume of de-identified, adjudicated claims? Answering these questions can help providers determine which offering has the most reliable, actionable data.
Providers who want to harness healthcare claims data to negotiate favorable rates and drive commercial success will want to seek out a best-in-class data service with capabilities, such as:
- Allows providers to see actual reimbursement rates from payers within a user-defined region and specialty without fear of breaking anti-trust or collusion rules
- Enables filtering by taxonomy to obtain the most accurate, relevant healthcare claims data
- Fosters healthcare market transparency by revealing charges, payments, and denials
- Eliminates “ghost rates” from the data so providers are working with legitimate numbers
- Offers visibility into payer behavior and total payment trend by payer and code to help providers support their position and make informed decisions
- Fosters market transparency to help providers establish benchmarks and analyze performance relative to their competition
Robust healthcare market intelligence, such as that provided by the ZOLL Claims Clarity data service, can transform how EM providers approach payer contracts. Armed with claims data to strengthen their position, providers can enter good faith negotiations more confident in what to expect and even knowing when to walk away from a payer contract that will be unprofitable or demand a heavy administrative burden. Finally, the tables have turned: providers need never again wonder if the contract they signed was a good one.