5 Factors for Spine Surgeons to Negotiate Better Payor Contracts

Written by Laura Dyrda | October 15, 2012 | Print  | Email
Here are five factors for spine surgeons to better payor negotiations.
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1. Gather objective quality data.
Insurance companies will ask for quality data during contract negotiations. Make sure you can produce information about your individual outcomes and highlight any positive points, such as a lack of complications, return to work status and pain scores.

Dr. Brian Gill"It would be in surgeons' best interest to have some kind of objective data such as outcomes data to show insurance companies or workers' compensation carriers to justify what they do and how effective they are," says J. Brian Gill, MD, a spine surgeon at Nebraska Spine Center in Omaha. "We do research studies on our patients for outcomes on post-surgical patients and look at Ostwestery scores as well as neck disability and return to work status. We compare that to available data for standard rates to show our treatments are as effective if not better."

While insurance companies will ask for this data and inspect it, they are more interested in cost data. Make sure your quality is high and if the cost is also high, defend your high costs by showing value in your outcomes.

"Track outcomes from a clinical standpoint and a patient satisfaction standpoint," says Richard Kube, MD, founder and CEO of Prairie Spine and Pain Institute and Prairie SurgiCare in Peoria, Ill. "Know how you stack up against others. If you can showDr. Richard Kube value for the services you provide from benchmarking, that is substantial."

2. Prepare cost-effectiveness and cost-savings data.
Insurance companies will be most interested in your cost data. They want to see value for the dollars they are spending and will be more willing to work with you if they know you are saving them money. Surgeons can save money by performing procedures that require a shorter hospital stay, less expensive implants and fewer diagnostic and imaging tests.

"If you can provide the same care and achieve better outcomes and lower costs, that's a win-win," says Dr. Gill. "You have to have the outcomes and control costs effectively to negotiate better contracts with payors."

Surgeons must understand the global cost of care, because even though the surgical fee isn't high, insurance companies are still paying a large sum for the other aspects of care. Show the insurance companies how you can lower that cost and they may be willing to increase the physician fee in return.

"What has worked well in the past — surgeons saying their costs are going up — isn't working very well now to negotiate higher rates," says Chad Beste of Professional Business Consultants. "The whole impetus for reimbursements is moving to value. By paying more money to the surgeon, you should show what insurance companies get in return: better outcomes and lower global costs."

3.  Offer a broad array of comprehensive services, including pain management.
An easy way to ensure lower global costs is by providing the service yourself. It can be cost effective for the insurance company if the practice performs the diagnostics and radiology services, which is also convenient for the patients, says Mr. Beste.

Another service insurance companies will be looking for is pain management. "Low back pain is in the top three in terms of total medical costs of any condition in the country, and more than 80 percent of these cases are non-surgical cases," says Mr. Beste. "To me, the development of a comprehensive service line around the early detection and appropriate management of those patients should signify lower costs. You have to come up with a strategy that can demonstrate to payors how you are adding value."

Most of the non-surgical pain management procedures are performed by interventional pain management physicians, chiropractors, physical therapists and other specialists — not surgeons.

4. Emphasize your strengths.
Highlight special skills or focus areas during payor negotiations that make you or your practice unique. This is especially true if your practice is located in a rural market.

"As a provider, you need to be aware of your surrounding market," says Dr. Kube. "Know your strengths and promote them. Also be aware of any services you provide that others do not. Make sure to point out these unique differences to payors."

Insurance companies tend to lump all surgeons together, especially in small markets. The fact that you are board-certified or fellowship-trained can be a negotiating point if you are the only one in the area.

5. Stay open to new payment models.
Several new payment models are now being introduced for medical care shifting from fee-for-service to pay-for performance. These payment models — such as accountable care organizations or bundled payments — are designed to split the risk among insurance companies and providers for the cost and quality of care. Ultimately, it remains to be seen whether any of these new models will become the standard reimbursement method or if yet another model will emerge.

"This is the period of greatest uncertainty in my professional career and this will continue over the next five years," says Mr. Beste. "I try not to put all my eggs in one basket; the world isn't going to go all to ACOs, but we are headed to a system where a sizable percentage of the population will be willing to pay more for higher quality healthcare while others will be in a state run program. Surgeons will have to participate in one or the other."

Pressure from insurance companies is driving more spine surgeons in-network, and as a result surgeons are working together in groups to leverage negotiating power. However, regardless of which payment model persists, Mr. Beste sees value being the crux of the negotiation. "Anything physicians can do to gear the discussion with payors toward to value, will increase the likelihood of better results during the negotiations."

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6 Steps to Optmimize OR Efficiency & Cut Costs With Minimally Invasive Spine Surgery

10 Steps to Attract Orthopedic & Spine Surgeons During Recruitment

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