Reiner Consulting and Associates
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What can I do to achieve a higher level of income?
Be Proactive
How often do you find yourself wondering how to maximize revenue? Do you think that managing a practice is getting harder and harder? I hear these questions repeatedly from doctors I work with. When asked what struggles they have the answers are similar…volume of patients dropping, payments declining, and overhead rising. What can be done? Physicians wonder if the problems involved with running a practice are their fault or if blame can be placed on managed care plans. Is the cost of running a practice too high? The answer is complex and there are no simple answers. Unfortunately some things can’t be controlled. The good news is there are ways doctors can improve efficiencies, increase revenue, and reduce expenses in their offices.
Here are some things that can be done to help maximize revenue and reduce expenses.
Contract Negotiation
Have you renegotiated your contracts? When was the last time you updated your contracts and how successful were you? Do you go back every year and renegotiate? If you have never updated your contracts, how long have the contracts been in existence? Contracts that have not been renegotiated in awhile contain opportunities to increase reimbursement if the negotiation is presented to the managed care plan in a formal manner.
Things to consider when renegotiating contracts:
• Start with the top payers - pick the ones with the biggest impact.
• Choose high volume services representing the bulk of your revenue. Look for the codes that will have the most impact on your bottom line.
• Research the total revenue for each one of the plans you want to negotiate. This can be used as comparison when you get an offer.
A practice should develop a sophisticated letter that details what the practice wants to accomplish in the negotiation. Several items that should be included in the letter to the payer include:
• Specific strengths of the practice – Toot your own horn!
• Things that make the practice unique including special services.
• Conveniences and quality improvement initiatives in place for patients.
• Cost effective measures implemented to help reduce costs for the payers.
Once you have crafted this letter, submit to appropriate contracting managers for consideration. Develop a relationship with payer contracting staff as this can have a significant impact in your negotiations. If the contractors know who you are they are much more likely to work a little harder to help you which can be the difference between success and failure. Meetings directly between the physician and the contractor can have an impact in the success as well.
One thing to remember is to never to accept “no” as the only answer. Contractors are programmed to say no at the beginning of almost every negotiation. They do this because about 50% of the practices will accept this answer and not bother to continue negotiation. DO NOT let this happen to you.
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