Declining reimbursements in the face of soaring inflation and an increased demand for healthcare is a frustrating, but familiar, scenario for many independent physicians.
"We as physicians have very little, if any, opportunity to speak with payers. If we are lucky, I get to speak to a 'claims specialist' to argue about why I am not being paid," Ravi Krishnan, MD, an ophthalmologist at The Eye Institute of Corpus Christi (Texas) told Becker's. "There is some so-called negotiation of the payment schedule beforehand, but as an owner of a small solo practice, I have very little bargaining power."
Some practice owners and physicians have found strategies that are useful in cutting through the frustrations of payer negotiations. Here are five notes for physician owners in payer talks:
1. Come equipped with data-driven insights: Providing detailed data on patient outcomes and the cost efficiencies of a practice can create more solid ground for potential negotiations.
"This data supports stronger arguments for fair reimbursement rates and value-based agreements," Lara Kelly, CEO of Gastroenterology of the Rockies, told Becker's.
2. Present patient-centered metrics, too. A 2023 survey published by Software Advice found that 38% of patients preferred independent physician offices, compared with 8% who prefer corporate healthcare settings. By most other metrics, there is little evidence that corporate settings provide better care, despite significantly higher prices — potentially a point of leverage for independent physicians.
"Emphasizing metrics related to patient satisfaction, recovery times and quality of care can strengthen the case for higher reimbursement rates," Ms. Kelly said. "Payers are increasingly focused on value-based care and positive patient outcomes."
3. Bring affiliated health system partners to the table, if possible. For independent physicians with some form of health system affiliation, inviting those partners to negotiations may increase leverage with payers. This has been helpful for Kristopher Kitz, CEO of Eye Associates of Tucson and Tuscon Ambulatory Anesthesia.
"Right now, we are renegotiating our payer contract because our rates are so low and we added service lines to the center," Mr. Kitz told Becker's. "And the only reason why they will speak with us and even entertain materially better rates is because we have a health system affiliation."
4. Purchase market data. Mr. Kitz noted that by purchasing relevant market data, independent practice owners may gain bargaining leverage with payers, as rates should be competitive with similar practices in a given region.
5. Understand and walk away from unfavorable government programs. Scott Ellsworth, president and founder of Ellsworth Consulting and a former senior executive at Centene, UnitedHealth Group's Optum, and Excellus Blue Cross Blue Shield, contributed his insights into payer negotiations in a Sept. 6 article in Becker's Payer Issues. He urged providers to capitalize on government programs, whether that means benefiting from them or turning them down altogether.
"By understanding and possibly terminating unprofitable contracts related to government programs, providers can reshape negotiations to focus on more profitable opportunities," he said.