Negotiating with Commercial Payers Takes Planning, Strategy

CHICAGO—Even with massive payment changes going on within Medicare, Medicaid and private insurers, rheumatologists have some leverage in negotiating their insurance contracts.

Dr. Baraf

That pearl was shared by Herbert Baraf, MD, FACP, MACR, clinical professor of medicine at George Washington University, Washington, D.C., during the session Advanced Strategies for Insurance Contracting in Rheumatology at the inaugural Practice Innovation Summit. Dr. Baraf also is a senior clinical advisor with the National Institute of Health’s National Institute of Arthritis and Musculoskeletal and Skin Diseases.

The session featured Dr. Baraf along with Catherine Jefcoat of ECG Management Consultants in the Chicago area.

“Why Can’t They Get Paid Better?”

Dr. Baraf reviewed some of the circumstances facing rheumatologists, including an average salary that’s near the bottom of the scale for specialists, a smaller number of people taking the rheumatology board exam compared with previous decades and a growing amount of medical debt.

At the same time, the shortage of rheumatologists reaches high levels in many cities, with 93% of rural counties having no rheumatologists, compared with 48% of urban counties.¹

“If rheumatologists are so busy, why can’t they get paid better?” he speculated.

To cope with rising costs, rheumatologists could see more patients, but their days are already full, Dr. Baraf said. They could reduce overhead, but that would make it harder to see more patients. Adding ancillary services is a possibility, but so is aiming to increase your reimbursement through insurance contracting.

One important reminder when negotiating insurance contracts is your attitude, Dr. Baraf said. Specifically, you should expect to receive payment from an insurer that covers your overhead, including payroll and other key expenses.

Realizing that practice care costs have steadily increased but that Medicare reimbursements have decreased 33% from 2001 to 2025, commercial insurers are the only source for improved reimbursements, he said.²

Dr. Baraf recommended analyzing your payers and finding answers to a few questions:

• What are payers reimbursing you for certain codes? Compare reimbursement rates so you have a benchmark.
• What impact would your withdrawal have on the payer or vice versa?
• What have colleagues in other fields experienced with negotiations with the payer?
• How busy is the payer? A payer with a smaller market share should pay at better rates.

Based on the answers to these questions, you may decide which contracts serve your practice and which do not. You may choose to withdraw from a payer completely, or use some but not all of their products based on their reimbursement rate. Some of the larger payers may have preferred provider organizations (PPOs), health maintenance organizations (HMOs), Medicare Advantage plans, Medicaid and other plans. You may decide that you would participate in a company’s PPO plan but not its HMO or Advantage plan, for example.

“If withdrawal leads to a new contract, it must be substantially better,” he advised. “Understand your market. Each market and each payer is different.”

Getting Down to Brass Tacks

When it comes to the actual negotiation with a payer, let them know if you are considering a full or partial withdrawal.

“This may be what brings the other party to the table by establishing your seriousness,” Dr. Baraf said.

Establish a rapport with the negotiator, and gain an understanding of where they are in the company hierarchy. Be flexible with your terms without selling out the practice.

Insurance negotiators aren’t persuaded by emotions; they want hard economic data, Dr. Baraf said. Be ready to share some numbers regarding your practice strength. Consider the following as you highlight what your practice has to offer:

• It’s not always about size. Practice strength can be measured in quality, quantity or caché.
• Aim to keep growing your practice, and let insurers know when you’ve grown.
• Consider mergers when needed to establish your practice strength.

Working with Patients

Of course, if you decide to withdraw from a certain insurer, that can affect your patients. Dr. Baraf shared a few pearls to make the process easier for patients ahead of time:

• Begin negotiations early enough that they can be concluded by Medicare Open Enrollment season. That can help patients to make certain coverage decisions.
• Let patients who have certain insurance plans know in advance that they may want to consider their options if you are negotiating with their plan.
• Remind patients that even if they leave the plan, they may still have some out-of-network coverage benefits they can use.
• Consider a separate out-of-network fee schedule or other expense cushioning.

By the Numbers

During the session, Ms. Jefcoat also shared insights into the current reality of insurance contracting.

She pointed to unprecedented volatility within managed care and noted that although most insurance is commercial, Medicare and Medicaid have a higher proportion of expenditures overall.

Changes to the structure of Medicaid affect all types of healthcare structures, from academic to rural healthcare centers along with community hospitals and others.

Many health systems also are dropping Medicare Advantage plans as certain payers pay substantially lower rates, deny coverage and cause prior authorization delays, Ms. Jefcoat said. For example, in 2023, 15 health systems nationally dropped their Medicare Advantage plans.³ In this year so far, 33 health systems have dropped Medicare Advantage plans.⁴

Ms. Jefcoat addressed the development of the ACR Value-based Payment Model pilot that touches on several different areas, including:

• The promotion of evidence-based guidelines that include meaningful quality measures and targets,
• A gold card program for prior authorization that eliminates prior authorization if a practice meets certain criteria,
• Tailored support to primary care providers to improve network referrals,
• Expanded access to rheumatology care with the use of telehealth and advanced practice providers,
• A shared savings model that includes claims cost benchmarking and a sharing percentage, and
• Data sharing reports shared regularly with practices.

Vanessa Caceres is a medical writer in Bradenton, Fla.

References

1. Mannion ML, Xie F, FitzGerald JD, et al. Changes in the workforce characteristics of providers who care for adult patients with rheumatologic and musculoskeletal disease in the United States. Arthritis Rheum. 2024;76:1153–1161.
2. American Medical Association. Medicare physician payment continues to fall further behind practice cost inflation. January 2025. https://www.ama-assn.org/system/files/2025-medicare-updates-inflation-chart.pdf.
3. Emerson J. Hospitals are dropping Medicare Advantage plans left and right. Becker’s Hospital Review. Sept. 27, 2023, updated Nov. 14, 2023. https://www.beckershospitalreview.com/finance/hospitals-are-dropping-medicare-advantage-left-and-right/.
4. Emerson J, Casolo E. 33 health systems dropping Medicare Advantage Plans. Becker’s Hospital Review. Oct. 16, 2025. https://www.beckershospitalreview.com/finance/20-health-systems-dropping-medicare-advantage-plans-2025/.