Exclusive Interview with Olga by Ambulatory Advisor Written by Brittany Belli
Negotiating urgent care contracts with payors can be a frustrating experience. Insurance companies are always looking to decrease their costs, so convincing them that you deserve an increase in compensation can be an uphill battle. By following these five tips and tricks, you can adequately prepare yourself prior to entering a contract negotiation and increase your chances of getting a higher compensation rate.
Timing is crucial
While it can be tempting to just jump right in and request a high compensation rate, Olga Khabinskay, credentialing and billing specialist and COO of WCH Service Bureau, Inc., says it’s best to wait a couple of years first.
“Urgent care providers that have an urgent care contract are allowed to request a fee negotiation after they’ve been in the network for two to three years,” Khabinskay says.
“Negotiations are done typically after the center has been in the network for some time so that it’s able to show how it has decreased the number of hospital visits and how valuable it is to the community,” Khabinskay says.
“It can take 30-100 or more days to receive a contract from a managed care organization or payor,” David Stern, CEO of Practice Velocity, says in a blog post.
“Every three years, a lot of things can change,” Khabinskay says. “Your internal overhead expenses will probably increase, staff size can increase, and equipment might need to be repaired.”
Back up your claim
A contract negotiation request typically involves a letter to the director of the network and provides additional information to the insurance companies. Attaching additional information such as letters of reference, costs of services provided, classification of staff members and relevant statistics can help persuade payors to grant you the increase that you’re looking for.
“Make sure that all of the elements of successfully running your urgent care center are outlined in your letter,” Khabinskay says. “Provide the overhead costs, flexibility of operations or hours and salaries of your staff.”
Khabinskay says it’s also important to designate whether you have physicians or physician assistants performing services in your center.
“Urgent care centers that are staffed with physicians are able to negotiate rates more quickly,” Khabinskay says.
Ron Dreskin, president of Integrated Healthcare LLC, says that providing certain statistics can help improve your chances of getting an increase in your fee schedule.
“If an urgent care center can prove that their services are similar to an emergency room, and say that if patients were to go to their center instead of the ER then the payor would gain significant benefits, that would be the biggest bang for your buck,” Dreskin says.
“The payors are going to react because they can shift monies from paying a hospital or an ER to paying you, and they can increase your compensation while still paying you a lot less than an ER.”
Khabinskay says that letters of reference can also be a huge determining factor in a contract negotiation.
“Letters that show how the urgent care center has changed the community for the better are great,” Khabinskay says. “You can have local schools and daycares write letters that say they come to your center in a time of need or go to your center to receive their flu shots. Anything that shows that you’re a well-rounded center that’s able to help the community is a plus.”
Khabinskay says that local primary care providers and patients can also provide letters that support you and your center.
“If a primary care doctor writes a letter saying that they’re confident with referring their patients to your urgent care center as an after-hours facility, that can help convince a payor to increase your rate,” Khabinskay says. “Patients that are a part of the insurance network that you’re negotiating with can also write letters saying that they’re very happy with the level and quality of care that they’ve been receiving. This can also be beneficial.”
Get close
“Always stay close with the network representative from the insurance company,” Khabinskay advises. “Remain in a close relationship with that person because they are the one who will present your request for a negotiation to the insurance board and they will be the first person on the team that will be making the increase, if it’s approved.”
Khabinskay says that you can even invite the representative to come by your facility and promote their insurance company.
“This allows them to sign up patients that are interested in their insurance, and it helps you network with the representative,” Khabinskay says. “It’s really important for them to remember your facility and for them to know who you are.”
“Urgent cares should be forming a partnership with the payors,” Dreskin says. “I’ve seen payors even promote urgent care centers to their enrollees, explaining that these centers provide similar services to an ER, but for a lower co-pay.”
Urgent care centers can also partner up with a hospital or other urgent care centers in order to increase their chances of getting a higher compensation rate.
“A single center is going to have a harder time negotiating a contract than a center that is aligned with a merger, or multiple centers,” Dreskin says. “If you’re got 50 or 60 centers, your negotiating power is going to be higher than if you only have one or two centers. Any large entity is going to have a better opportunity than a smaller entity, that’s just a fact.”
Negotiate
Requesting an increase in your fee schedule can be daunting, but don’t forget that the whole point of a contract negotiation is negotiating.
“When writing the letter requesting an increase, I would ask for a 5% increase, knowing that payors will be negotiating down,” Khabinskay advises. “They will usually meet you halfway at 2-3%.”
If your negotiation is approved, Khabinskay says to expect the new, increased fee schedule to start in the new fiscal year. If you get declined, you have the right to appeal, but Khabinskay says that the overall process is very difficult.
“If the insurance company is funded by the state, you may not be able to negotiate rates at all,” Khabinskay warns. “If a negotiation is declined, try again in six months.”
One way to make the negotiation process easier is to look at the insurance that your patients are covered by. The more patients you have covered under a payor, the more likely they are to grant you an increase in compensation.
“Pursue the payors that you already know,” Stern says. “Make them believe that negotiating with you is in their best interest.”
Dreskin advises to make payors see an increase in fee schedule in a mutually beneficial light, instead of a negative one.
“Telling the payor that you want more while they get less is going to create an adversarial situation,” Dreskin warns. “Give them something in return. Show them that you can save them money by keeping their patients out of the emergency room.”
Dreskin says that if you have statistics demonstrating that your patient volume has gone up, while the patient volume at ERs in your vicinity has gone down, you can use that as an incentive to get a higher rate.
