Payer contracts are critical to our healthcare system and the revenue cycle of all practices. Negotiating better payer contracts can help healthcare organizations to generate more revenue, creating a more suitable environment for better patient care.
If you want to negotiate a better payer contract, you must familiarize yourself with specific terms and provisions. That can help prevent denials, maximize reimbursement, and run a smoother revenue cycle.
Read on to discover what payer contracts are, what you can expect from them, and how to prepare for negotiating the best terms.
What Is a Payer Contract?
Payer contracts explain and define a reimbursement structure for the provider who delivers medical services to a patient with a specific health plan. The payer contract covers reimbursement rates, provider credentialing, medical necessity, provider networks, benefits, and more.
Understanding key aspects of your payer contract ensures you receive timely and sufficient reimbursement for your services. Knowing all ins and outs will help you draw more patients to your practice, avoid denied claims, offer better patient care, and maintain a steady income flow.
What You Can Expect From a Payer Contract
Roughly 9 out of 10 Americans have some kind of health insurance, which is why payer contracts are so important. However, each insurance provider has a unique set of terms, credentialing requirements, reimbursement structures, and other aspects. That’s why you should focus on five essential elements of each payer contract, no matter what provider you enroll with.
5 Tips for Preparing for a Payer Contract
If you want to negotiate the best terms and reimbursement rates, you need to read your payer contract carefully and pay special attention to these five things.
Many payer contracts have clauses that let the insurance company change the terms at will. These unilateral amendments allow the insurance company to change the requirements and reimbursement rates with minimal notice. You should always consider how much time you have to object to these changes and renegotiate them.
Reimbursement and Fee Schedules
A payer contract should explain in detail the reimbursement structure and fee schedule. You should get familiar with these procedures and check whether the agreement allows the insurance company to change these terms.
Most payer contracts will guarantee reimbursement only for necessary medical care. However, each payer defines a “medical necessity” differently. That’s why you should carefully read the contract and identify approaches and limitations limiting your reimbursements and interfering with your patient’s access to affordable care.
Network and Credentialing Requirements
Each healthcare provider must undergo a credentialing process that verifies their competency and training. That may differ depending on the insurance company, so you need to get familiar with unique requirements and timelines.
Network requirements state the standards you must meet as a provider to join the network. Make sure you understand all criteria of a payer’s network and whether they are allowed to change these requirements.
Renewal and Termination
Some payer contracts automatically renew after the duration expires, while others don’t. You need to pay attention to renewal and termination clauses, as this will allow you to renegotiate better terms or opt-out of contracts that don’t benefit your practice.
Professional Help for Negotiating Better Contracts
Keeping up with payer contracts can be challenging if you’re focused on running your healthcare practice. That’s why most medical providers choose to hire a professional consultant who can help them with payer contracts.
Working with Peregrine Healthcare is easy, and we can help negotiate better contracts, maximize reimbursements, implement effective contract strategies, and more. Click on this link to learn how you can contact us and start negotiating better payer contracts.