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Take a closer look at new talking points in payer contracts

Managed Care Weekly Advisor, February 7, 2007

Many healthcare facilities are revisiting the various services they provide and looking to make non-Medicare patients a larger component of their patient mix. That, in turn, puts a premium on commercial contracting.

For facilities that are prepared to intensify their contracting efforts with commercial payers, try these tips:

  1. Address contract clause and reimbursement rates.The most-favored-nation clause basically says the lowest rate that your facility accepts from any payer is the rate that you will accept with the negotiating payer, notwithstanding that payer's fee schedule. Remove this clause from contracts altogether, and try to avoid Medicare-based reimbursement in commercial contracts.
  2. Retain flexibility in your contracts. Recalibrating priorities based on the proposed new payment system is a bit premature because the final rule outlining the new payment system to be published later in 2007 could still bring more change.
  3. Increase your negotiating power. Maximize your leverage in contract negotiations with commercial payers by illustrating your worth to them. Adding to or changing your range of services might boost your value to payers and could help you recover from reimbursement cuts that may have hit your main specialty.
  4. Maximize the efficiency of your facility's operations. The efficiency with which your facility provides any additional services is essential to your financial success. Although you may want to expand the types of services you provide, overall reimbursement rates are going down-so your facility's efficiency is going to be the critical factor for success.