Managed Care Contract Negotiations
Mar 15

Use utilization data to win an increase in payer rates


Utilization data, which collectively reflect a provider’s efficiency and, in turn, the value they can offer a payer, is one stone that sometimes remains unturned during contract negotiations. The following are a few tips to use the data and get an increase in payer rates (they are based on an interview I did with  Managed Care Contracting and Reimbursement Advisor

  1. Approach the payer for data. Ask the payer to tell you how your practice or facility is doing in regard to the related cost drivers. Ask for a comparison to your peers about various criteria such as length of stay in the hospital, pharmacy cost, ancillary cost, cost per patient, and cost per particular diagnosis code.
  2. Gather the data internally. Consider how your specialty drives healthcare costs. What decision-making do you do that could lead to efficient healthcare? Look to the hospital information system. Hospitals have good information, but providers rarely take advantage of this.
  3. Meet with the payer. Once you conduct this analysis, meet with the payer to present your utilization data and convey that you believe you drive costs lower than competitors in your network. Therefore, you believe that you deserve some kind of price increase.


About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →