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.