Factors to Consider Before Terminating a Payer
Wednesday, January 4, 2017 9:00 AM
Questions to Ask Before Pulling the Trigger on a Payer Contract
You may find yourself tempted to walk away from a payer who seems insistent on virtually stealing your services. In those moments, it’s essential to stop, take a deep breath, and be sure you’re looking at the broader picture. Don’t let emotions lead you into a position that ultimately harms the practice.
Before pulling that trigger, consider the following implications:
- What percent of your business does this payer represent? If it’s sufficiently high and you don’t have other income sources waiting to replace that revenue, you might find that “sometimes half a loaf is better than none.” As a longer-term strategy, you may be able to gradually shift your patient ratios to other plans having more favorable reimbursement.
- Does the payer have a vision plan? If so, are you included on that vision plan provider panel? Sometimes the revenue generated from these ancillary services can help offset what would seem to be a dismal reimbursement level from the medical plan alone.
- Do you own an ambulatory surgery center? If so, is your facility an approved provider under the plan? Again, this is another ancillary revenue source that can improve your overall reimbursement from the payer.
- Who are the primary care physicians for the payer, and would your termination adversely affect your relationship with these referrers? If referring physicians get into the habit of sending plan patients elsewhere, they may find it convenient to send their other patients elsewhere, too.
- Do you participate in other insurance plans offered by the payer? If so, would your termination from one plan affect your status in others? In many cases, provider participation is bundled and requires you to participate in all of the payer’s plans rather than choosing among them. If so, you would need to consider the potential revenue loss from those sources, as well.
- What are the termination provisions of the contract, and how would patients be notified? Payer contracts require a defined notice period before you can walk away. During this transition, the payer may be entitled to reduce your reimbursement. In addition, the payer will likely be able to control what’s communicated to patients about the termination. Your office should be prepared for many angry and confused patients as the transition to other providers
isannounced and arranged.
None of these issues should stand in the way of terminating a truly inadequate contract. However, just be certain that you’ve considered all the implications involved before taking that step.
YOUR TURN: What other considerations should be taken into account before terminating a payer contract? Please leave your response in the comment section below. Thank you.