Renegotiate rates with existing contracts
Reading Time - 2 minute
Why you should spend 2 minutes to read this:
Failing to renegotiate your rates will impact your bottom line by +5%
Insurances margins are also being squeezed as the government aims to decrease overall healthcare spend. Yet, this does not mean that your current contract rate reflects the highest rate they are willing to pay you.
These are forces that increase your value to an insurance company:
Develop solutions aligned to their profitability. see: I’m So Good, You Need Me
Grow in size to become a larger portion of their provider network. See: Grow | In size and density
Force insurances to carry you via patient demand. Note this is likely the weakest force, the majority of your effort should be on #1 #2.
Renegotiating contract rates should be a crucial part of your annual contract management cycle.
If you fail to provide value to insurances, unique to your practice (basically, are you replaceable?)
then, they likely will not agree to your target contract rate.
At this point you would then go through the logic captured in: Contracts: In, Out or Hold to decide if you keep the contract.
If you need any help with regarding this topic or the topics linked, let us know in the form below.
High-level actions you can take based on this article:
1. Review current renegotiation processes
2. Develop improved renegotiation processes
3. Engage payors in renegotiations
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