Steps for Managed Care Contract Negotiation/Renegotiation

May 10, 2007

___ Obtain copy of payor’s existing contract.

___ Obtain payor’s existing reimbursement schedule for the related contract.

___ Assess antitrust concerns; consult legal counsel if necessary.

___ If reimbursement schedule is not based on RBRVS, then compare to current Medicare rates and determine percent of Medicare being reimbursed.

___ Obtain CPT frequency report.

___ Draft contracting questionnaire and submit to client for completion. (Purpose: Determine and assess practice leverage position with payor)

___ Obtain contact information (phone number, physical address, email address) for the provider representative and the manager for the provider representative that handles contract issues for practice. Also, obtain same information for the executive director.

___ Develop contracting strategy.

___ Decide most favorable way to initially contact the payor. (i.e. letter, meeting, telephone, email)

___ Contact payor and make contract proposal. Negotiate!

___ Maintain strict follow-up schedule.

___ Obtain payor’s response to the proposal.

___ Review and analyze payor’s response and decide whether to accept or counterpropose.

Acceptance

___ If decision is made to accept, submit to physician for review and acceptance.

___ If physician accepts, notify payor and document.

___ Obtain written contract change and execute.

___ Make sure future reimbursement agrees with new contracted rates.

Counterproposal

___ If decision is to counter-propose, adjust counterproposal appropriately (Counterproposal maybe our original proposal). Submit to payor.

___ Maintain strict follow-up schedule.

___ If necessary communicate with payor contact’s superiors.

___ Obtain payor’s final response to counterproposal.

___ Review and analyze payor’s response and decide whether to accept or reject. Discuss proposal with physician.

___ If physician accepts, notify payor and document.

___ Obtain written contract change and execute.

___ Make sure future reimbursement agrees with new contracted rates.

___ If physician rejects, decide whether or not to terminate payor contract.

___ Analyze potential financial impact as a result of termination.

___ If physician decides not to terminate, negotiation ends.

___ If physician decides to terminate, assess anti-trust issues. Confer with legal counsel if necessary.

___ Have physician submit termination notice to payor.

___ Re-contact payor and determine if they are willing to reconsider their position.

___ Assist physician with patient notification.

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