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Tip: Use pay-for-performance data to negotiate with plans

Patient Financial Services Weekly Advisor, June 10, 2005

If you have the ability to collect pay-for-performance data now, you may want to go to the table and see what you can negotiate, says Jennie Campbell, a consultant at Pershing Yoakley & Associates.

There are a couple of ways a negotiation would play out, Campbell says. She recalls a physician under contract with United Healthcare who got special recognition within the network as a preferred provider. "It was a tiered network system, where physicians have shown they could improve clinical outcomes and save money for the plan, and are getting more patients directed toward them."

Negotiations can lead to a "withhold" scenario as well. Industry standard reflects a 3-5% withhold that could be distributed as a bonus to better performers. For example, if you negotiated rates of $50 for a given code and have a 1-2% withhold, then you would have a $1.50 withhold that would not come to you; it would be put into a pool and paid out to you as a bonus later. "However, we typically advise our clients to avoid a withhold and focus on negotiating a bonus," Campbell says.

In addition to negotiating a bonus, you should try to negotiate higher payment rates. But unfortunately, Campbell says, there's no established guideline regarding how much you should ask for.

"Pay for performance is still so new, and there are so many different kinds of deals being made out there. The biggest problem we're seeing with our clients is that they're having a hard time getting the data and getting themselves in position. So if [providers] can start now, while it's a new initiative, they'll be ready as it becomes more commonly accepted."

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