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How to Negotiate Your Contracted Rate with Insurance Payers – Ask a Biller #8

In Ask A Biller Episode 8, Dylan and Maggie provide tips on how to negotiate your contracted rates with insurance payers. See the full episode above, transcript and slides below.

See the full transcript here (scroll to read):

MAGGIE: Hi Everyone, thanks for tuning in to Ask A Biller, my name is Maggie. I’m a revenue cycle specialist with SmartBilling Pro here at SimplePractice

DYLAN: And I’m Dylan, the SmartBilling Pro manager. Today, we’re going to talk to you about a very important topic– contracted rates and more specifically, how to assure that you’re maximizing your insurance reimbursement. We surveyed our customers on this topic, and a whopping 68% didn’t even know this was an option!

MAGGIE: A contracted rate refers to the amount that an insurance payer agrees you should be reimbursed for your services. This is also known as a negotiated rate, an allowed amount, or an agreed upon amount.

DYLAN: When you join an insurance panel for the first time, you’ll go through a process that is called credentialing. It is during this process that your contracted rate is determined.

MAGGIE: Contracted rates vary between payers. Some of the factors that the payers consider when determining what they’re going to offer you as a contracted rate are
Number of years in practice
Geographic location
Level of Education
Area(s) of expertise/ specialties– including additional certificates

DYLAN: If you’re a new clinician just starting their practice, paneling with insurance companies can be an intimidating process. The most important thing to keep in mind when deciding to panel with an insurance company is that these things can take a considerable amount of time. We don’t recommend letting your clients know that you take their insurance until you have confirmation from the payer that you are on their panel.

MAGGIE: The reason behind this is that you may start the process right away at the beginning of the year, but not be approved for several months. If you see clients during the in between period you should not expect the insurance company to reimburse you for those session. Your official contract date will be the date that you are approved. So while you may be eager to get started, If you are seeing clients during that period, there’s no guarantee that you will be reimbursed for those services.

DYLAN: For more in-depth information on how the paneling process works for clinicians new to insurance, check out our very first episode of ask a biller which you can watch or download the transcribed version of at ter.li/askabiller. Or, subscribe to SimplePractice on Youtube!

MAGGIE: For clinicians that have been on insurance panels for a while, you may be wondering…is there any way I could be earning more? If so, where do I start?

DYLAN: When you’re an in-network clinician, it’s kind of like the insurance payer is your employer. They determine how much your services are worth every year. You submit your claims to them, and they are the ones that issue those checks.

MAGGIE: With that in mind, the same way that employees expect to be given a raise from their employer when their performance improves, they’re exceeding expectations, or keeping up with inflation. Clinicians should expect the same from insurance payers. There are some payers that have a “take it or leave it” attitude regarding rates, but usually there is some room for negotiation.

DYLAN: We’ll walk you through the things that you should consider and the steps that you should take before reaching out to the payer to negotiate a new rate.

MAGGIE: The first thing you’ll want to do is assemble a list of differentiating factors. Take some time to think about what sets you apart from other professionals in your field and what makes you a valuable asset to a popular insurance panel.

DYLAN: Such as—you speak multiple languages, emergency or crisis treatment, seeing a large quantity of clients, serving in under-represented locations, early morning, late evening, and weekend hours, home visits, specializing with kids, chemical dependency or dual diagnosis, serving people with autism, or serving veterans.

MAGGIE: If you’ve added new specializations, training, or certificates this will be really helpful as well. You can add this to the continuing education portion of your application. Panels want to see that you’re expanding to be able to service more of their members through time,

DYLAN: The next thing you’ll want to do is put together some data on your current contracted rate for common CPT codes. If you’re paneled with other payers and the rates are competitive, you can include those as well. Decide how much of a raise you are going to ask for. We recommend starting with requesting a 5% increase.

MAGGIE: If you’re not sure what your current contracted rate is, take a look through some of your previous sessions– the amount that the client pays + the amount that the insurance paid= your contracted rate for that service. For a 5% increase, multiply your contracted rate for each CPT code by “1.05”.

DYLAN: Now that you have all of your information together and you know what you’re going to ask for, it’s time to put together a letter to the insurance panel. Similar to when you have to appeal a decision on a denied claim, this letter should be sensible and to the point.

MAGGIE: In your letter you will need to state your intention to apply for increased compensation based on merit and expertise.
How long you’ve been contracted with that panel.
The number of patients you see on a regular basis from that panel as well (hint: the higher, the better).
Your specialization, credentials, skills, and differentiating factors.
Discuss any plan for continued education and new services provided.
Create a simple table listing the CPT codes you most commonly bill for and your suggested new rates.
State your enjoyment of working with this panel and that you hope to continue working with them for another X amount of years.

DYLAN: The last step in this process is to reach out to your panel and apply. Call the provider relations department for the payer. This will be the same point of contact that you used to apply to join the panel in the first place. If you’re not sure, these numbers are usually easy to find by simply searching the name of the payer with “provider relations.” If you can’t find it that way, start by calling the number of the back of your client’s ID card.

MAGGIE: Always ask for full names and for reference numbers from anyone that you speak with. They will guide you in the process of submitting your request. You can expect that many payers will only accept these requests by fax or mail. If that’s the case, make sure to ask the representative how long it should take before they will process your request. Set a reminder for yourself to follow up within that time frame.

DYLAN: If you are requested to follow up with an interview, avoid some of these common mistakes:
Complaining. This is not the best opportunity to air grievances with the payer over late payments, audits, or denials, as tempting as that may be.
Don’t over-represent or over-sell yourself. Simply be accurate, to the point and proud of the services you provide.

MAGGIE: Do make sure to do the following:
Be personable and friendly. This can go a long way if this process ends up getting dragged out. You want to be remembered by the representative as someone that is patient and respectful. There’s a good chance you will end up back on the phone with them. Ask the representative for their name and use it in conversation.
Explain the time and money you spend on your continued education and enhanced service offerings.
Make it clear you enjoy working with that panel and hope to continue an “even stronger relationship” in the future.
If you’re nervous, call a friend or colleague first to learn from their experience going through this and they may be able to give you some pointers as well.

DYLAN: Next, we’re going to address some questions that our customers have raised over how and when to negotiate with an insurance panel.

MAGGIE: Our first question is from Ron:

How long should I be on a panel before I try ask for a raise in my rate? – Ron

Ron, there’s no right or wrong answer here. However, you should be honest with yourself when determining whether or not this is the right step for you. If you don’t have any new skills or education from when you initially paneled, it might not be worth it to go through this process. Unless you’ve made big improvements to your practice, we generally say to wait about 2 years before reaching out to negotiate pay.

DYLAN: Kim brings up a great question which is,

What happens if my request is denied? – Kim

Unfortunately this could happen, however, it’s important to not take this personally and don’t lose hope, you’ll have a plenty of opportunities in the future. Contact your rep to better understand the reason for the denial. If it’s something that you can incorporate right away, take their feedback seriously and reapply in 6 months.

MAGGIE: The next question is

How often can I negotiate my rate? – Anne

There is no common limit for the number of times that you can request an increase in pay, however it’s important to be realistic about when a raise is appropriate. It’s a smart idea to keep this in the back of your head anytime you decide to embark on something that will expand your services or improve your expertise. Keep a running document of your significant achievements throughout the year so that you don’t miss anything when the time comes to submit your first request.

DYLAN: That’s all we have for you on this topic. Thanks so much for tuning in, and we’ve love to connect with you through social—you can follow us on instagram, facebook, and twitter! We also have a thriving community group on facebook, where private practice professionals are asking and answering questions daily. Search “SimplePractice Community” on facebook and request to join.

MAGGIE: Until next time,
Keep it Simple!

PROPS TO: https://therathink.com/negotiate-higher-income/

Negotiating Your Contracted Rate Webinar slides:

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Ask a Biller 8: Negotiating Your Contracted Rates

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