1. Know practice data during payor negotiations. When going into payor negotiations, know the practice’s statistical data to prove that the practice is maximizing return on the payor’s premium dollars. This data includes, but is not limited to, the number of x-rays and MRIs the physicians order, the number of rehabilitation days and the number of days patients spend at hospitals for inpatient procedures. Practice administrators should also be able to explain how the physicians work with hospital staff to make sure patients are spending the least number of days in the hospital within the appropriate standards of care. “This forces the insurance companies to go back and look at their own data if they haven’t done that already and that puts the administrator in a strong position,” says Patrick Hinton, executive director of the Jacksonville (Fla.) Orthopaedic Institute.
The administrator should also know how his or her statistics match up against other area practices. If the practice costs are higher than they are at others, know how to explain these circumstances to the payor. “Say we have higher costs compared to other orthopedic providers, but we have a higher concentration of subspecialists, so we see a lot of orthopedic complications other physicians wouldn’t see, which drives the cost up,” says Mr. Hinton. “This helps make the case that the companies are getting value for what they pay for.”
2. Research reimbursement for spine procedures at hospitals before payor negotiations. Since Medicare does not reimburse spine cases in the outpatient setting, negotiating ASC rates for spine cases with private payors can be more difficult than other specialties because payors often set rates at a percent or multiple of Medicare rates. “Negotiating for spine is much more difficult than orthopedics because payors don’t really know how to pay for spine — Medicare doesn’t reimburse it in the ASC,” says Jay Rom, president of Blue Chip Surgical Center Partners. “You should negotiate off of what payors are paying the hospital. You want to be less expensive than the hospital and sell that to the payors.”
Mr. Rom suggests administrators check payor Web sites for information on estimated costs for spine procedures at the hospital. This will give them a better sense of current payor costs as insurers are increasingly making cost estimates available to their members. Blue Chip ASCs are typically able to offer a 30-40 percent discount over hospital costs to payors while still covering costs and building in a profit, says Mr. Rom.
3. Educate the out-of-network payors about why they should cover the procedures. Laser Spine Institute works most often with out-of-network payors, so the administrators often speak with payors about why they should cover a patient’s procedure. Jimmy St. Louis, Chief Corporate Operations Officer of Laser Spine Institute, makes sure to point out that patients undergoing minimally invasive surgery have less conservative care before choosing surgical treatment, that the surgery is done as an outpatient procedure and that the recovery rate is faster. All of these factors contribute to a lower cost for payors and a higher rate of patient efficacy, which is another important point to cover with the payors. “When we educate payors and patients on the reimbursement level, we anticipate we’ll see improved reimbursement because it is less money than what they would pay for the traditional surgery,” says Mr. St. Louis.
4. Leverage unpaid claims. When you’re in contract negotiations, if a payor owes you a significant amount of money in unpaid claims, you can use this as leverage, says Susan Charkin, MPH, president of Healthcents, an ASC and physician specialty hospital contracting and consulting group. “There are certain payors that are notorious for not paying on-time and also not paying you according to contract,” she says. If you are dealing with such a payor, remind them about the unpaid claims. You can ask the payor to rectify the situation and offer something in exchange, such as your conceding a small increase in payment for a procedure you weren’t hoping to receive anyway.
“Very few people do this but it’s very powerful,” says Ms. Charkin. “You get the contractor to do your dirty work and you don’t have to deal with the claims. A payor would rather pay you what they owe than give you an increase.”
5. Partner with others or a larger entity. Craig Antell, DO, a physical medicine and rehabilitation physician at Madison Avenue Physical Rehabilitation and Wellness in New York, says larger sports medicine practices will have greater negotiating power and leverage. PRW has a staff of 16 full-time therapists and five physicians, as well as one pain management physician, but the practice is also part of a larger entity that negotiates contracts for all its members. Dr. Antell also is part of an association through NYU Medical Center, which negotiates payor contracts on a bulk basis, thus achieving more favorable compensation rates. Most major hospitals have such an organization, and joining one is a great way to achieve higher reimbursement, Dr. Antell says. These organizations are very selective in who may participate and thus are able to give the carriers quality physicians in their network.
