Improving Contract Rates

Editor's note: This is Part 1 of a 12-part series focused on optimizing medical group financial performance. Each brief in this series takes 2 to 3 minutes to read and identifies specific actions medical groups can take to achieve sustainable financial improvements.

Assessment

Regular payer contract negotiations are essential to securing appropriate reimbursement for your services. Several factors influence the success of these negotiations, including the payer’s and the provider’s market leverage. Strong operational performance, demonstrated in service and quality metrics, enhances market positioning and improves negotiating power.

To assess this opportunity, compare commercial carrier allowable schedules to Medicare rates. Different service categories — such as E/M visits, medicine services, and surgical procedures — will typically see varying percentages of Medicare reimbursement. These rates also fluctuate by geographic region. A thorough evaluation requires a clear understanding of your market and service mix.