This article is written by Matt Kilton, Principal and Chief Operating Officer, Eveia Health Consulting & Management.
You've succeeded in recruiting new surgeons to your existing surgery center, or are developing a new facility, and now you're ready to open and establish negotiations with your major payers. The payers have acknowledged a willingness to negotiate in good faith, as well as understand the opportunity to realize value by working with your center to create an in-network relationship.
Here are a number of suggestions to help improve your chances of successfully negotiating with payers; these observations will help educate the payer and will enhance the effectiveness of your negotiations.
1. Provide specific information about your new surgeons, including qualifications, specialties and any unique or uncommon services they offer. It's critical to differentiate your ASC, especially in markets where competition with other surgery centers exists.
2. Organize a complete list of procedures, with CPT codes, that you expect will be performed at the ASC. Payers will want to know what services the surgeon intends to provide, and the volume of cases that could move to the ASC if final contract rates were appropriate and clinical capabilities of the center were optimized.
3. Gather general case cost data; this step is critical, especially in situations where the new surgeon or services are a compliment to your existing case mix, as opposed to situations where a new surgeon plans to perform more of the types of services the ASC is already delivering. This information valuable both for your own operations, as well as to educate the payer if the opportunity arises.
4. Collect implant and device invoices, equipment rental invoices and invoices for high cost disposable items. Gathering invoices helps to establish what the true case cost will be, both for items you may be able to negotiate incremental reimbursement for, as well as those that the payer methodology assumes are included in the reimbursement rate.
5. Gather potential case volume information from the inbound surgeons. The data should provide where are the cases are currently being performed, and the number of cases by payer. Payers have this data, but they rarely invest the time and resources to fully understand what cases will come. In fact, it's very difficult for the payer to be able to quantify from a list of services which ones would or could have been performed in the ASC, so providing this data makes the process easier and more efficient for the payer.
6. Obtain from the payer full documentation of their reimbursement methodology including payment method (groupers, APC's percent of charge, etc), reimbursement for implants, and find out if they can accommodate non-standard reimbursement alternatives. For each procedure the new physicians will potentially perform at the ASC, you will need this to evaluate whether the code is ASC allowable, and how it's reimbursed. From there you will start to formulate the key elements of your negotiation.
7. It is recommended that the surgeon send to the payer (to be consistent) a list of the surgeon's recent cases that could have been performed at the ASC, with member information, so the payer can pull case-specific spend data. Again, while it's true the payer has this data, the time and energy to extract it often prevents payors from doing so. Have the surgeon's office send it directly to the payer so there is no violation of HIPAA regulations, and get a copy without the member information or dates of service, so you know how many and what types of services were shared.
8. Track lost cases; cases that are not coming to the ASC during negotiations, to illustrate opportunity cost. Again, this requires some help on the part of the surgeon, but is extremely effective in demonstrating the lost opportunity to the payer.
9. Avoid accepting undervalued rates to "demonstrate you can perform the case." Payers use this approach to determine just how low an ASC can move on rates and still perform the case, and assume that an ASC would never knowingly chose to lose money to prove they can perform a service. By accepting low rates an ASC demonstrates that the low rates are adequate enough to cover costs. Additionally, once the initial rates are in effect the payer has absolutely no motivation to work aggressively, and could instead intentionally extend discussions for a prolonged period of time. Alternatively, suggest the ASC and payer agree to a negotiated letter of agreement for that specific case only.
Payers who are willing and able to negotiate will value the information and data you can share, and it will provide both parties with an equal understanding of the opportunities. Anecdotally, the payers should have this information, but presenting it to them in a concise, organized manner will show you've done your homework, and make the payer's job easier. Removing the challenges of data collection and educating the payer negotiator will lend to increased opportunities for a mutually beneficial contracting outcome.
More Articles on Surgery Centers:
Why Employee Engagement in Vital to Your ASC
ACOs: Why They Matter for ASCs
5 Physician Alignment Options That Don't Involve Full Employment
You've succeeded in recruiting new surgeons to your existing surgery center, or are developing a new facility, and now you're ready to open and establish negotiations with your major payers. The payers have acknowledged a willingness to negotiate in good faith, as well as understand the opportunity to realize value by working with your center to create an in-network relationship.
Here are a number of suggestions to help improve your chances of successfully negotiating with payers; these observations will help educate the payer and will enhance the effectiveness of your negotiations.
1. Provide specific information about your new surgeons, including qualifications, specialties and any unique or uncommon services they offer. It's critical to differentiate your ASC, especially in markets where competition with other surgery centers exists.
2. Organize a complete list of procedures, with CPT codes, that you expect will be performed at the ASC. Payers will want to know what services the surgeon intends to provide, and the volume of cases that could move to the ASC if final contract rates were appropriate and clinical capabilities of the center were optimized.
3. Gather general case cost data; this step is critical, especially in situations where the new surgeon or services are a compliment to your existing case mix, as opposed to situations where a new surgeon plans to perform more of the types of services the ASC is already delivering. This information valuable both for your own operations, as well as to educate the payer if the opportunity arises.
4. Collect implant and device invoices, equipment rental invoices and invoices for high cost disposable items. Gathering invoices helps to establish what the true case cost will be, both for items you may be able to negotiate incremental reimbursement for, as well as those that the payer methodology assumes are included in the reimbursement rate.
5. Gather potential case volume information from the inbound surgeons. The data should provide where are the cases are currently being performed, and the number of cases by payer. Payers have this data, but they rarely invest the time and resources to fully understand what cases will come. In fact, it's very difficult for the payer to be able to quantify from a list of services which ones would or could have been performed in the ASC, so providing this data makes the process easier and more efficient for the payer.
6. Obtain from the payer full documentation of their reimbursement methodology including payment method (groupers, APC's percent of charge, etc), reimbursement for implants, and find out if they can accommodate non-standard reimbursement alternatives. For each procedure the new physicians will potentially perform at the ASC, you will need this to evaluate whether the code is ASC allowable, and how it's reimbursed. From there you will start to formulate the key elements of your negotiation.
7. It is recommended that the surgeon send to the payer (to be consistent) a list of the surgeon's recent cases that could have been performed at the ASC, with member information, so the payer can pull case-specific spend data. Again, while it's true the payer has this data, the time and energy to extract it often prevents payors from doing so. Have the surgeon's office send it directly to the payer so there is no violation of HIPAA regulations, and get a copy without the member information or dates of service, so you know how many and what types of services were shared.
8. Track lost cases; cases that are not coming to the ASC during negotiations, to illustrate opportunity cost. Again, this requires some help on the part of the surgeon, but is extremely effective in demonstrating the lost opportunity to the payer.
9. Avoid accepting undervalued rates to "demonstrate you can perform the case." Payers use this approach to determine just how low an ASC can move on rates and still perform the case, and assume that an ASC would never knowingly chose to lose money to prove they can perform a service. By accepting low rates an ASC demonstrates that the low rates are adequate enough to cover costs. Additionally, once the initial rates are in effect the payer has absolutely no motivation to work aggressively, and could instead intentionally extend discussions for a prolonged period of time. Alternatively, suggest the ASC and payer agree to a negotiated letter of agreement for that specific case only.
Payers who are willing and able to negotiate will value the information and data you can share, and it will provide both parties with an equal understanding of the opportunities. Anecdotally, the payers should have this information, but presenting it to them in a concise, organized manner will show you've done your homework, and make the payer's job easier. Removing the challenges of data collection and educating the payer negotiator will lend to increased opportunities for a mutually beneficial contracting outcome.
More Articles on Surgery Centers:
Why Employee Engagement in Vital to Your ASC
ACOs: Why They Matter for ASCs
5 Physician Alignment Options That Don't Involve Full Employment