By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    UV damage to eyes
    Warning Signs of Long-Term UV Damage to Your Eyes
    December 9, 2021
    degree for healthcare job
    The Ultimate Healthcare Recruiting and Staffing Guidebook
    March 21, 2022
    medicare part d benefits
    Everything that You Need to Know About Medicare Part D
    August 15, 2022
    Latest News
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
    The Wide-Ranging Benefits of Magnesium Supplements
    June 11, 2025
    The Best Home Remedies for Migraines
    June 5, 2025
    The Hidden Impact Of Stress On Your Body’s Alignment And Balance
    May 22, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    nursing program
    7 Tips to Picking the Best Nursing Program
    February 5, 2018
    Health Care: A Modern-Day Blade Runner?
    December 10, 2014
    Occupational Therapy Assistant | Medical Assistant | Home Health Aide
    In-Demand Healthcare Support Jobs
    April 16, 2016
    Latest News
    Top HIPAA-Compliant Messaging Apps for Healthcare Teams
    June 25, 2025
    When Healthcare Ends, the Legal Process Begins: What Families Should Know About Probate and Medical Estates
    June 20, 2025
    Preventing Contamination In Healthcare Facilities Starts With Hygiene
    June 15, 2025
    Strengthening Healthcare Systems Through Clinical and Administrative Career Development
    June 13, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Strategies for Payer Negotiation
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > Strategies for Payer Negotiation
BusinessFinanceHospital Administration

Strategies for Payer Negotiation

Abby Norman
Last updated: April 15, 2015 8:00 am
Abby Norman
Share
5 Min Read
SHARE

“Let us never negotiate out of fear. But let us never fear to negotiate.”

Contents
Getting – and Keeping — Big Payer ContractsKnow Your Organization’s Bargaining PowerUse SWOTCollect and Analyze Your DataThe Break-even PointKnow Your Deal-breakers and Stick To Your GunsKnow Your TimelineInclude the Right PeopleKeep an Eye on Deadlines

― John F. Kennedy

“Let us never negotiate out of fear. But let us never fear to negotiate.”

― John F. Kennedy

More Read

What Graduates Of Medical College Should Look For In An Employer
An Easy Way to Improve the Cash Flow of a Medical Practice
Essential Guidelines for Maximizing Medical Practice Revenue as Competition Swells
Providers: Shifting Landscape and Mindset
The Website as Part of a Strategic Hospital Marketing Plan

Getting – and Keeping — Big Payer Contracts

When it comes to procuring and maintaining your contracts with payers, there is perhaps no skillset greater to possess than that of the art of payer negotiation. In today’s healthcare market, there’s not only a need to be informed and competitive, but healthcare organizations need to have a very clear understanding of where they stand amid the competition.

payer negotiations

Know Your Organization’s Bargaining Power

Before you can begin your payer negotiation, you have to develop a clear understanding of your organization’s expectations, abilities and any areas of weakness or vulnerability that could jeopardize the contracts.

Use SWOT

One way of achieving this is through SWOT analysis. SWOT stands for “Strengths, Weaknesses, Opportunities and Threats” all of which are worth exploring within your organization as a means to demonstrate your organization’s readiness for a multitude of undertakings, including entering into new contracts.

Collect and Analyze Your Data

Through SWOT, you can also identify your principles, the overall impact of the current market state on your organization and what the cost is for delivering quality healthcare. Raw data can be collected and subsequently analyzed through utilization reports which will become invaluable as you move through the process of identifying new payors you’d like to engage with, as well as maintaining good relationships with those you already work with.

The Break-even Point

A great source of data may come from your CPT code usage. By tallying up the most used codes and analyzing what you are paid based on the amount billed for each, you can determine your break-even point. This is a financial marker that will be important when you are pursuing new contracts. If you are entering into a new contract with a payor where you will not surpass your break-even point, you may need to reevaluate forging that relationship – and pass on it unless there is another compelling reason for maintaining it.

Know Your Deal-breakers and Stick To Your Guns

When entering into new contracts it’s also vital to know what your bottom line is and what your “must-haves” will be. In any payer negotiation it’s unlikely that you’ll get everything you ask for, so you need to know what are the absolute deal-breakers for your organization; as well as what you may be able to live without.

You’ll want to review the “legalese” of the contract with a fine toothed comb and make sure that you understand everything set forth in the document. If something is unclear or doesn’t seem in line with your discussions, ask for clarification and stick to your guns. You will also want to be certain of your state laws, which will differ (perhaps subtly) from the federal laws. You will also want a clear, itemized list of what isn’t included or covered within the contract payment terms, which will perhaps be one of the most frequently asked questions by consumers.

Know Your Timeline

Another important consideration for such contracts is leaving or renewing them when the elapsed time has passed. Most contracts will have a clause that allows organizations to leave in the first 90-days after the contract is signed, but you’ll want to be certain of that timeframe before signing on. Furthermore, many engage it what is called an “evergreen clause”, which means that there will be an automatic renewal each year without discussion unless one party explicitly states otherwise.

Include the Right People

When you’re reviewing this information, you’ll want to include several key stakeholders in your organization such as your medical director, office manager, your hospital attorney and the coding and billing specialists who will have a keen understanding of those aforementioned CPT codes.

Keep an Eye on Deadlines

At the end of the day, the easiest mistake to make may be all about timing: don’t get so wrapped up in the big picture that you miss your filing deadlines. The time requirement for negotiating this contracts and making a decision may pass by if you aren’t actively aware of your timetable.

Share This Article
Facebook Copy Link Print
Share
By Abby Norman
My name is Abby Norman and I am a healthcare blogger. With over 10 years of experience in the medical field, I have developed a passion for helping others understand the complexities of healthcare.

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

women dental care
What Is a Smile Makeover and How Much Does It Cost?
Dental health
June 30, 2025
HIPAA-Compliant Messaging Apps
Top HIPAA-Compliant Messaging Apps for Healthcare Teams
Global Healthcare Policy & Law Technology
June 25, 2025
recovering from injury
Rebuilding After Injury: Path to Physical and Emotional Recovery
News
June 22, 2025
scientist using microscope
When Healthcare Ends, the Legal Process Begins: What Families Should Know About Probate and Medical Estates
Global Healthcare
June 18, 2025

You Might also Like

business intelligence and medical billing
BusinessFinanceHospital AdministrationMedical RecordsOrthopaedics

Using Business Intelligence and Analytics for Orthopedic Billing

June 27, 2013

New Medical Technologies at Startups

March 31, 2012

Why Don’t Patients Hit the Panic Button in Hospitals? Lessons from Condition H

June 13, 2011
content is king
BusinesseHealth

Using Content Marketing to Deliver Inbound Patient Prospects

March 4, 2016
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?