“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
