Negotiating a Health Plan Contract

Many physicians assume that attempting to negotiate a health plan contract is hopeless — but that is a myth. Practices have been successful in negotiation attempts, winning both payment and term changes in their contracts. The first step in securing a better contract is deciding if you want to contract with the health plan in first place, and if so, how badly. To do this, you need to do some homework.

• Do the fees paid cover your true costs of doing business?
• Do you understand how the fees are calculated and the implications for the services you offer?
• Does the health plan steer patients to you?
• Are the plan’s administrative requirements reasonable for your practice?
• Is the health plan crucial to your payer mix?

Only after you have a clear picture of how the contract might play out in your practice can you negotiate effectively to get the terms and fees you need to make it worthwhile — or decide to walk away if you can’t. Any time is a good time to assess contracts but just remember, you can't win if you don't even try.