With reimbursement rates always under threat, behavioral health practitioners in private practice might find themselves at a disadvantage when negotiating higher rates. Larger organizations can afford to hire third-party negotiators to handle it for them but as the person wearing all the hats, you might not know where, how, or when to start.
Many behavioral health providers are great clinicians, but most have never been trained to run a business let alone trained to negotiate reimbursement rates for behavioral health with insurance providers. More than likely, you’ve given in to the administrative complexities and simply accepted lower fees often at great personal and professional cost—either working longer hours to compensate or even opting out of the insurance system altogether. But whether you are just starting out or a seasoned private practice provider, it’s important to evaluate your business every few years and negotiate a raise.
Even if some insurance companies have a “take it or leave it” policy, you should feel empowered to negotiate higher reimbursement rates for behavioral health. Merely taking a proactive approach will set you apart from others within the network. Pay equity in the behavioral health industry would be easy if it weren’t for federal antitrust constraints preventing you from citing other provider’s fees in your negotiations. You will need to prove you are an asset by doing a little extra legwork.
Negotiating Reimbursement Rates: Where to Start
One of the first steps to negotiating higher reimbursement rates for behavioral health is building relationships. Start with your provider relations representative, with that person’s manager, and anyone else you can find within the insurance company’s provider relations group. At a minimum, set up biannual—quarterly is better—check in meetings. The meetings will give you a chance to get an update on the insurance network, any changes to upcoming programs or legislation, and to give them an update on your practice. This isn’t the time to play hardball, it is the time to make friends. Get a little personal—ask them questions, find out more about them—anything to build the relationship. This is the person who will go to bat for you when you ask for the increase. This also makes it easier for you, as you should feel more comfortable, when you reach the next phase.
If you don’t know who your provider relations rep is, look at your contract, your welcome letter, or even call the provider 800 number. If you want to be a super negotiator, network at your local and national association meetings or industry events. Work your way up the ladder. LinkedIn is also a great resource to mine for names of people within different levels of an organization.
Negotiating Reimbursement Rates: How to Demonstrate Value
Once relationships are established, you need to understand what differentiates your practice and how to present that to the insurance provider during the negotiation phase. In other words, what do you bring to the table? How do you prove your value? You can begin by breaking it down into a few categories:
- Client Experience
The first three bullets focus on who you are and the services you provide, and the last two bullets serve as the data points to support your case.
It’s important for you to understand the nuances and scarcity of your specialty in your geographic area. This is the essence of who you are and what your practice is about. Keep a list of providers in your area, keep track of your training, keep track of your service record, etc. Do you take on the tough cases? Do you provide services in other languages? Do you show consistently high volume of claims?
Take the time to track these points—either through an electronic system or some other mechanism—and create a written description to present in your negotiation. Most provider relations reps may not fully understand the distinctions or variations in your practice, but they do understand the gaps in their provider network and strategic priorities handed down from leadership. The more information you can provide to help differentiate you in their eyes, the more likely it is that your attributes will match one of their gaps or strategic priorities. Data regarding client experience and clinical outcomes will separate you further from other providers. All of this could help give you leverage when it comes time to negotiate better rates.
When we talk about the client experience, we are talking not only about creating trust and providing a safe environment, but also about making sure the right tools are in place to manage the relationship and track outcomes. Investing in the right Electronic Health System (EHR) that can manage patient information, measure patient outcomes, provide pre- and post-care surveying, and even billing information will give you more time—time you can spend on building your patient relationships and less time being bogged down by administrative tasks.
Negotiating Reimbursement Rates: Providing the Right Data
Beyond helping your rep understand who you are, it is important to help them see the value you deliver to the network. You will need to track certain data points to help make your case when negotiating higher reimbursement rates. First, understand your fee schedule organized by Current Procedure Terminology (CPT) codes. Reviewing your fee schedule can help identify your top paying providers and how much they pay for each code. You can organize this information into a spreadsheet or simply pull a report from your EHR system as part of your data points for negotiation.
Tracking Measurement-Based Care (MBC) metrics will help separate you from the rest of your colleagues. When you set up your business, as part of your business plan, you should invest in a powerful EHR system, ideally one that is built for behavioral health care. Not only will a good EHR help you improve clients’ outcomes, but it will also save you time during the patient intake process through automated data capture and populations of clinical notes and the patient chart.
One of the easiest metrics to track for negotiating reimbursement rates for behavioral health is your time-to-appointment. The demand for mental health services is high, which means longer wait times for appointments. Wait lists, capacity shortages, and length of time for referrals, can affect someone’s mental health and even exasperate their current condition. Insurance companies are bound to take a second look at a provider who offers, and who can prove they offer, immediate access to services.
Tracking patient outcomes is another great data point to present when negotiating reimbursement rates for behavioral health. There is great value in proving that a patient’s mental health condition is improving as costs associated with mental illness exceed $300 billion a year (Aetna, 2015). Outcome-based care or measurement-based care is gradually being adopted among the mental health community as more attention is being paid to accountability and the heavy cost of comorbid medical and behavioral health conditions.
Using rating scales for assessment and monitoring of progress to adjust treatment plans successfully leads to lower cost and effort per patient with better client outcomes. Your EHR system makes it easier to collect, chart, share, and report data. A robust EHR with integrated outcomes-based care functionality can handle the majority of the administrative workload, allowing the practice to enjoy the benefits of outcome measures without becoming overwhelmed by extra tasks.
Negotiating Reimbursement Rates: Putting it all Together
When you’ve gathered all your information, built your business case, and created your value proposition, you can lay it all out in an email or during your scheduled meeting. You can do this at any time or if you feel more comfortable, during a contract phase. Be respectful and lay out your case with proof points. Don’t forget to stress increases in administrative costs!
After making your case, you will need to wait for an answer. Once they come back to you, you can accept the offer or counter it. If the first offer isn’t what you’d hoped, work your other contacts within the organization. No matter what, make sure you get it in writing and that you check subsequent payments against your new contract. While an increase is not guaranteed, if you can show your value with the right metrics, you at least put yourself in a better bargaining position.
Negotiating Reimbursement Rates: How Valant Can Help
The hardest part of negotiation is tracking and storing all the data you need to make your case. That is where Valant’s EHR software comes in. This EHR and practice management system seamlessly integrates into all aspects of your business to capture data, trend results, and generate reports to show outcomes in your clinical and administrative workflows. For example, you can quickly and easily run a report showing the decrease in the severity of a patient’s symptoms over time, your average time-to-appointment, or even your highest billing CPTs. Valant’s tools can also help you evaluate your provider performance, fine-tune patient treatment plans, capture more value from insurance partners, and deliver a better experience to your clients.
Want to see how? Request a demo today.