How to Negotiate a Managed Care Contract

How Physicians Should Negotiate a Managed Care Agreement

Even the largest managed care company is usually willing to negotiate its participating provider agreements to some extent.  Amazingly, however, many physician practices sign the first draft that is presented to them.  By doing so, they not only “leave money on the table,” but they also permit administrative hassles for their staff to develop that could have been avoided with aggressive negotiation of all managed care agreements.  The bigger the managed care company’s share of the market, the more important it is to assure a reasonable agreement is reached.  Physicians must aggressively protect their rights through negotiation or risk continuing reductions in their income and increases in workload.  How to negotiate a managed care contract is an important skill for physicians to have.  We recommend the following for negotiating a managed care contract:

  • Have an experienced healthcare attorney review the agreement
  • Require a verifiable fee schedule
  • Make sure that you will be paid for your work
  • Make sure you know with whom you are contracting
  • Learn from past problems
  • Limit the managed care organization’s ability to reduce previously paid claims
  • Aggressively limit the plan’s right to offset money owed to the practice
  • Maintain your leverage at termination
  • Do not allow the agreement to continue while a dispute is pending
  • Do not violate anti-trust laws by discussing compensation with colleagues

The above was excerpted from The Physician’s Comprehensive Guide to Negotiatings chapter on Negotiation of a Managed Care Agreement written by Dennis Hursh.  Mr. Hursh is a principal in Hursh & Hursh, P.C., a Middletown, Pennsylvania, law firm concentrating on representation of physicians and physician group practices. Dennis’ practice is concentrated on healthcare contract drafting, negotiation, and interpretation.  He represents physicians in all areas of contracting and practice management, and is involved in the design, organization, and representation of employer welfare benefit plans, physician organizations, preferred provider organizations, hospital-physician joint ventures, coordinated care organizations, insurers and third party administrators.

Steven Babitsky, Esq. is a negotiating consultant and founder of SEAK, Inc., an ACCME accredited continuing education company.  Steve has trained thousands of physicians.  He is  the co-author of The Physician’s Comprehensive Guide to Negotiating and Never Lose Again, Become a Top Negotiator by Asking the Right Questions and is the presenter on SEAK’s highly-acclaimed DVD negotiating training program for physicians, Negotiating Skills for Physicians.

 

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