ASC Managed Care Negotiation Best Practices: Tip #5

In our first tip, we discussed the preparation needed for successful contract negotiation. Our second tip explained the contract language that needs to be addressed regarding covered services and reimbursement. The third tip covered other areas of contract language that require close scrutiny. The fourth tip addressed the need for research and gathering information on managed care organizations (MCOs). This final tip focuses on techniques which may be helpful in one-on-one negotiations.

Tip #5: The Art of Negotiating

This is where the contest begins. Your opponent is well-versed in negotiation and already knows what points can be conceded or modified. You are well-prepared with facts and figures and knowledge of what you need in order for the managed care contract to be financially feasible for your ASC.

The following is a list of the basic methods and tactics that may assist you in successfully negotiating a viable contract.

Methods/Approaches
To be successful in your discussions, you need to be:

  • Prepared – Here is where all of your advance research and preparation pays off. Rehearse.
  • Organized – Have all of your information easily accessible
  • Confident – Be convincing and persuasive.
  • Ambitious – Have high expectations and don't be afraid to voice them.
  • Determined – Ask for what you want. Be persistent.
  • Positive – If your attitude is confident and you show conviction in what you say, your professionalism will impress your opponent.
  • Courteous – Be polite, show respect and use good manners.
  • Reasonable – Know what points you can concede. Strive for reciprocity.

Tactics/Strategies

The following list describes some areas that may work to your advantage in negotiation:

1. Take the initiative – Be the discussion leader. Choose issues you wish to discuss. Make recommendations as to length of time available, break times, etc.

2. Open channels of communication – Request speaking with a representative who has ability to make decisions. Use verbal interaction negotiation, only progressing to e-mail communication for final, straightforward communications.

3. Leverage joint venture – If your ASC is joint ventured with a hospital, leverage the relationship the hospital has with the payers and MCO representatives. Request inclusion in the current hospital contract, rates, benefits, etc.

4. Know your market and define market share – Have your data ready:

  • provide case costs;
  • show how ASCs are more efficient and save money compared to hospitals;
  • demonstrate how MCO's large contracted employee groups would benefit from using your ASC (e.g., lower costs, personalized care, faster turnarounds, improved patient satisfaction); and
  • explain what makes your ASC unique in your market (e.g., special services performed only in your ASC, you are the only ASC in 50 miles, list of specialties and sub-specialties performed in your ASC, roster of well-respected physicians on staff).

5. Highlight common objectives – Working together for the best patient outcome, reasonable reimbursement of cost with some profit, etc.

6. Present ASC needs – Carve outs for high-cost cases, implant reimbursement.

7. Use questions and hypothetical cases – Often helps in detecting opponent's needs and areas of impasse.

8. Use restraint – Know when to stay silent. Be brief, never interrupt

9. Make notes – Important to remember what was said and also gives you time to think.

10. Know concessions – What issues you can concede. Understand the difference between concession and compromise.

11. Plan oppositions – What contract terms are unacceptable to your ASC (e.g., inequitable rates, non-specific timely reimbursement clause).

12. Do not accept boiler-plate contracts – There are still some areas you may be able to negotiate.

As mentioned previously, MCOs are increasingly assuming a "take-it-or-leave-it" attitude in contract negotiations. However, if you are prepared, know what goals you need to achieve, have rehearsed and plan to employ the strategies you have reviewed above, you are in the best position possible to attain favorable results.

Access Tip #1 on Preparation, Tip #2 on Defining Terms/Terminology (Part I), Tip #3 on Defining Terms/Terminology (Part II) and Tip #4 on Critical Areas When Researching Managed Care Organizations. Catch up on previous tips here.

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