Since the first managed care plans were introduced, relationships between physicians and payers have been rocky. It has not been uncommon for controversies between the two sides to result in lawsuits, contract terminations and regulatory intervention. Both sides recognize that each needs the other to survive — payers must populate their networks with sizeable numbers of physicians, while physicians must contract with payers to get reimbursed for patient care.
The friction between the two groups arises from many sources. Physicians charge that payers have ratcheted reimbursement down to an unreasonable level, while increasing the so-called “hassle factor” — paperwork, phone calls and other administrative burdens that physicians say make it difficult to deal with some payers. Meanwhile, managed care plans are under pressure to show demonstrable improvements in the quality of care while reducing the overall cost. Their efforts to standardize healthcare and encourage physicians to comply with best-practice guidelines rankles contracted physicians. But with the government, employers and enrollees pressuring payers to offer broad networks, it has been difficult for payers to walk away from hard-to-please physicians.
Across the county, physicians have adopted a variety of strategies to improve their bargaining position with payers. Some have used lawsuits to fight what they describe as unfair contracting practices, while others have lobbied state and federal officials to strengthen laws and improve their enforcement. Meanwhile, physicians in some areas have worked to create direct contracting arrangements with employers. The most effective physicians are those increasing their proficiency in contract negotiations and contract management to improve payments terms, minimize administrative burdens, and avoid unexpected requirements. This requires three crucial steps. First, knowing which terms are required by law, so that time is not wasted on provisions that must be, or should be, included. Second, negotiating payer agreements that create a standard set of requirements across products, and fill-in where the law leaves off. Third, implementing an internal office system that effectively monitors both the physician’s and the payer’s performance in against the terms of the agreement. These issues and more are the focus of the Texas Medical Association’s seminar series entitled, “Take Back the Power: Payer Contract Negotiations.”