Managed Care Negotiation: You Have the Leverage
In the last ten to fifteen years, emergency physicians were asked/forced into contracting with managed care plans due to pressure from hospital administration, physician/hospital organizations or hospital managed care departments. Many emergency physicians complied with the managed care contract requests to stay in good graces with the hospital or simply be a team player. In the heat of the managed care battle, hospital administrative personnel believed that the managed care company had the negotiating power and many allowed the managed care plans to force their less than desirable rates upon the hospital in an effort to maintain market share. In other instances, some managed care plans gave the hospital desirable rates at the expense of the physician reimbursement rates. The interesting part of the managed care equation is that the managed care plan often contracted with your competing hospital, thus only the managed care plans benefited. Much to the dismay of many, hospital administrative types did not understand this balance of power, the real initiative of the managed care plan, and felt the need to continue contracting with numerous plans at rates that were sure to create financial problems for the hospitals and/or physician groups.
Since many hospitals have lost millions, they are re-addressing their participation with many managed care plans and aggressively renegotiating for better rates. In the same light, so to should the emergency physicians. Now more than ever before, hospital administrative personnel are willing to listen to the reimbursement needs of Emergency Physicians when it comes to negotiating with managed care plans. Many hospitals understand that the emergency physicians must make their money from insured (commercial and managed care) patients due to the overwhelming number of uninsured and Medicaid patients. Your reimbursement needs from insured patients are important because it directly affects whether a subsidy is necessary and/or how much subsidy is necessary. Hospitals need quality emergency physicians to effectively provide patient care for their emergency departments and managed care companies must have facilities for their insured to get that quality care.
The last major enhancement for emergency physician reimbursement is the recognition of prudent layperson. Prudent Layperson is recognized at the national and state level as the standard for determining whether a true emergency exists. The passage of this legislation was critical because it effectively ended much of the senseless retrospective denial of emergency department claims. Enforcement and fines levied at the state level have sent a message to these insurance giants that the times have changed and their patterns of claim denial are no longer acceptable. Many of the industry giants have now decided to pay all emergency department claims, regardless of whether you are in or out of network, to avoid hassles with prudent layperson issues. This change is enormous for the reimbursement of emergency physicians. Now is the time to evaluate all of your contracts.
SEVEN TIPS ON CONTRACTS
In closing, this process can and is very difficult; however, it is the financial backbone for your practice. The time and money you spend on this process is critical to your future.