3 Skillful Payer Negotiation Strategies

Karen Minich-Pourshadi, for HealthLeaders Media , April 25, 2011

Beyond financials, Kobe suggests that financial leaders come prepared with clinical outcome rates and services provided for the payer's customers.

"Regulatory changes are pushing healthcare in different directions and in some cases encouraging partnering with payers," he notes. "It may be beneficial to find out how a hospital can work with the payer on areas such as diabetes to reduce the costs to the provider and the payer."

Lastly, as part of your tactical strategy, Kobe says that healthcare financial leaders should also know when or if they are willing to cancel a contract entirely.

"If you are going to take the nuclear option, you have to know in advance if it is economically viable to give up the contract," he says.

The tactic can be beneficial in some instances, Kobe says, as it can result in a more mutually beneficial negotiation later. "I've seen it happen where the payer would negotiate in the beginning and the provider dropped them. Later when the payer realized they needed [the hospital] they were more willing to negotiate. … Sometimes you need to surprise the payer to really get everyone talking," he says.

Although the payment environment may change in the coming years, one area that's unlikely to change is payer contract negotiations—payers certainly won't make it any easier for financial leaders to get additional reimbursement. By coming prepared with data and strategies, CFOs can make the process less favorable for payers and more favorable for the hospital or health system.

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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