A driving force behind hospital and private equity acquisitions of private practices has been to gain leverage in negotiations with carriers. You don’t have to join a large organization, but you do have to perform a thoughtful analysis of your practice’s services, reimbursements and patient mix to arm yourself to do battle with major carriers.

That being said, a single physician practice usually has little hope of a successful carrier negotiation. The baseline volume needed for success is $6 million per year in “allowable” amounts, either in commercial or Medicare Advantage plans. Straight Medicare and Medicaid reimbursements are fixed by region or state, so don’t even think about those. Your results will primarily come from your highest volume commercial carriers.

While it is possible to conduct these negotiations utilizing internal resources, most practices seeking reimbursement improvement look to firms specializing in the task.

An analysis should include:

How many patients have you served in the past year with this carrier?
What services have you provided to them and what is the volume of each service?
Who in your geographic area provides the same services? Hopefully few!
What makes your practice stand out from your competition?
What metrics can you cite pointing to high patient satisfaction and superior outcomes?
What is being paid to other area providers in your specialty?

Obviously, some of these metrics/data are going to be hard to come up with. A good contract negotiation firm will glean appropriate data from your EHR/PM platform to prove your points. Part of their analysis will be to pinpoint services that have been provided at a higher frequency. You may benefit from an increase in select CPTs or CPT code ranges more than a blanket increase which includes services you seldom provide.

While the Federal government’s push for price transparency is a noble effort, many hospitals have not complied and independent physician practices thus far have eluded the mandate. However, firms that specialize in negotiations maintain reimbursement information which is vital to their efforts and ultimately your success.

Here’s my key point: you must be willing to walk away from the carrier. As anyone who deals with them knows, they are skilled and ruthless. You may have to dig in your heels and rely on out of network reimbursement with the uncooperative carrier.