ASC Managed Care Negotiation Best Practices: Tip #1

Reimbursement from private healthcare payers usually represent a significant percentage of an ASC's revenue. Therefore, effective negotiation that yields strong and equitable managed care contracts are an essential part of an ASC's financial plan.

Reaching an agreement with a managed care organization (MCO) requires your ASC's contract negotiator to establish a relationship with the payer based on understanding each party's needs and through collaboration and compromise.

Tip #1: Preparation

Plan on building a relationship with MCO representatives and educating them on what procedures can be performed in your ASC and how your ASC can save their organization money. Before negotiations begin, evaluate the following key areas:

  • Know your case cost (direct and indirect). Prepare a list of your 10 most common procedures by CPT code to provide to the MCO, requesting their proposed reimbursement rates for each.
  • Define your specialties and sub-specialties.
  • Identify your competitive advantages (e.g., only ASC within X miles, specialty focus, lower cost/better outcomes than hospitals).
  • Know your market and define your market share.
  • Understand the difference in health plans offered by the payer (e.g., HMO, PPO, POS, EPO).

You will also want to research and understand the requirements of each individual MCO. The internet is a great place to obtain information on specific healthcare payers. Don't neglect or diminish the importance of doing your homework before you sit down with the MCO.

Stay tuned for our Tip #2: Defining Terms and Terminology in MCO Contract Negotiation.

Catch up on previous tips, including the four-part series on fee schedule best practices, here.

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