4 Ways To “Manage” Managed Care Contracts

National Medical

National Medical

Managed care contracting is often overlooked and is critical to the financial well being of your center. Here are four basic rules that you should know when negotiating with carriers.

1. Direction of care

Knowing all of the different products a particular network offers is helpful in understanding how a potential contract will affect your center. Requesting information about covered lives in the area and the products available is crucial to the layout of a contract in regards to the potential revenue of a specific region. For example, if a large local employer or government agency utilizes a specific product, make sure the negotiated contract covers it.

2. Bring back minor procedures

ASCs have historically turned down minor procedures that are not cost-effective when performed in a center. Payors want to save money as well. Negotiate a contract that provides profitable reimbursement for minor procedures currently taken to a hospital.

3. Dealing with a bad contract

Providers at the mercy of an unfair contract have the option to renegotiate or opt out. Opening the lines of communication via letter or e-mail and requesting renegotiations is an important first step. Keep in mind that the payor/provider relationship is important and should not be damaged by a hostile approach.  Some reasonable requests include increased reimbursement and carve-outs for specific procedures or implantable devices.

4. Professional Services

Using professional services for managed care contracting can be extremely beneficial for a center’s growth. Negotiating an extra two or three hundred dollars per case can increase profits by thousands of dollars monthly. Professional services can also decrease the workload that a center may have, allowing the center to focus on providing quality patient care.

Ref. Becker’s Healthcare

National Medical’s playbook for Managed Care Contracting is available in our e-book titled The Financial Impact of Managed Care Contracting in Orthopedics. Click here to download the e-book and receive the full Managed Care Contracting Checklist. 


This post was first published September 8, 2010 and was updated July 29, 2020.

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