UPDATED (12-25-2020) – Negotiating with Goliath-sized payers can be an intimidating experience for a Healthcare organization. But being small has it’s advantages too. When a small organization is able to prove that the higher rates are affecting their bottom line, payers are more likely to negotiate a lower rate — especially when the practice is able to present unique value, in a unique way.
Here are 5 simple negotiation strategies we’ve seen work for organizations of all shapes and sizes.
1. Speak With the Right Person
We’ve all spent a ridiculous amount of time on the phone with someone, only to find out that they don’t have the authority to make important decisions. This is why it’s important to ask early on if you can speak with a supervisor or executive who is able to negotiate. Ideally, you need to locate a service representative at the company who handles incentives and contracts.
“Preparation is a big part of the game.”
2. Communicate Your Value
As previously mentioned, building a strong value proposition is important. Is your organization accredited? Do you have a lot of positive patient reviews? Do you provide services in an area where there aren’t many other providers, do you care for a special demographic of patients not treated by other local physicians or provide a unique lab test? Preparation is a big part of the game, and if you show up with an impressive list of credentials that showcases your organization’s strengths, you’ll be more likely to reach a rate that works for you.
3. Build Trust with Good Data
Once you’ve established that you’re talking to the right person and you’ve shared value, it’s time to negotiate. But before you begin, it’s important to have your data on hand. Your organization should provide simple data that shows the level of quality care you provide for happy patients while containing costs. This will establish trust and build credibility on behalf of the provider.
When a practice is able to paint a mental picture of stability and financial integrity through the use of good data, it gives even the smallest of practices a negotiating advantage.
“Don’t be afraid to counter offer. You might be surprised.”
4. Negotiate with Confidence
When it comes to negotiating, a lot of insurance companies use a “take it or leave it” approach. But if the organization has something unique to offer the payer, they could find themselves in a great position to negotiate. There’s also something else to consider. The payer likely already sees value in the organization, otherwise, they would not have made it this far in the payer enrollment process.
If insurance companies want to hold their spot in the super-competitive healthcare market, they’ll need to make deals with a small organization more often than not. When organizations communicate their value early in the meeting, they’ll be able to leverage their negotiation power and reach an agreement that makes everyone happy.
If all else fails, out of network contracts or single case agreements are always an option. Make sure you have the expertise to financially model in-network, out of network or single case rates to make sure you negotiate the best possible rate.
5. Counter Offer
Sometimes you’re just not going to get the rate you want. Not to worry, negotiations aren’t over yet. For example, you can ask for better terms on the window for resubmitting claims, or for ways to streamline the prior authorization process. The point here is not to give up. Don’t just roll over for the giant. Don’t be afraid to counter offer. You might be surprised.
Negotiating can be exciting for some, while dreadful for others. Ideally, hiring an expert (middleman) that can do the negotiating on your organization’s behalf is the better choice. But if you’re going to go at it alone, make sure you speak to the right person, be prepared with data, negotiate with confidence, and above all, communicate your unique value. We all have strengths — something that makes us “special.” Proudly expose it and get the rates you desire.