Deciding to terminate a payor contract is always a tough proposition, especially when a payor contract provides you with a lot of your revenues. However, sometimes you just have to make a stand, especially with reimbursement “tanking” as much as it is lately.
I know of one medical practice that did just that. Their contract involved 28% of their business! But they planned for the change – they worked aggressively to review and cleanup anything they could in billing to ensure that the practice maximized the cash flow that it had. In addition, the practice advertised and built more business in other markets. Two years later they had a contract with the payer that was much better than our original one.
Before terminating any payer contract, always take a look at the soon-to-be patient’s out-of-network benefit coverage. Sometimes it’s not that onerous. However, if the patient-pay portion is a high, you can expect patients will look elsewhere for care.
Just because you are suddenly and out of network provider doesn’t mean patients can’t still see you. You’ll just have to be more aggressive with the discounts you apply to the patient-pay portion of your account receivable.
It can be done!