Negotiating your reimbursement rates can have a huge financial impact to your practice. Every practice that Ive worked with has at least a handful of advantages to negotiating their contract.

Here are a few examples:

A neurology practice in Arizona had trouble with their largest payer. They had used other consultants to negotiate their rates but they were unsuccessful. We discovered that there was a shortage of neurologists in the area - among a few other advantages - and once we pointed out this information to the health plan, they agreed to give the practice a 20% increase over current rates. The trick was to carefully convey the information and show the numbers to the health plan.

A radiology facility in California was accepting patients from a certain insurance company as a courtesy to its referring providers. In reality, the reimbursement from this insurance company was so low that they were losing money on these patients. I completed an analysis on behalf of the practice that showed that the facility was actually one of the few facilities with technology (MRIs, CTs, Etc.) that was actually saving the health plan money. The negotiation resulted in turning this contract from a loss-leader to one that actually provided a profit of about $60,000 per year for the facility.

An urgent care physician with a strong practice and large volume of patients contacted NGA Healthcare. We showed the health plans that the facility was able to keep patients out of the emergency room. The health plans agreed to a 10% increase in reimbursement across most of the practice's contracts, resulting in an additional $50,000 to the bottom line of the practice, per year.

After negotiating as many contracts as I have, Ive found that there a few simple strategies that work in your favor and can result in a favorable negotiation. The trick is to convey the information carefully to the health plan and get the information in front of the right people.

Nathaniel Arana is nationally recognized healthcare business consultant with experience ranging across many different specialties. He is a physician advocate and has helped practices become more profitable by allowing his clients to focus on patient care by helping get rid of the business headaches. You can subscribe to his newsletter here. You can email Nathaniel at nathaniel@ngahealthcare.com or check out www.ngahealthcare.com.