Our Leveraged Negotiations Approach
Negotiating with Payers can be at best challenging and frustrating for providers.
The current environment gives payers significant leverage at the bargaining table as historically most payers view negotiations from the standpoint of the golden rule “their gold, their rules”.
To level the playing field and negotiate successfully, providers must be strategic in their approach to upcoming payer negotiations. Below we will lay out a series of strategies and approaches that based on our recent experience, can yield materially better outcomes when done correctly. Every payer/provider negotiation is unique and while there is no “Silver Bullet” to coming out ahead on your negotiations, being thoughtful and strategic in your approach will always yield better results.
It’s first important to understand the mindset and approach of payers when it comes to negotiating with providers.
Payers are in no rush to give away money, most contracts today are evergreen and as a result, there is no incentive for payers to be the first to act. Payers count on this and will sit back and wait for providers to make the first move. Payers know that the longer negotiations drag on and the closer they get to the term date, the strong their position becomes, even with a termination on the table. Payer motivations, goals & objectives during contract renewals vary based on the payer. It’s important to understand who you are negotiating with and their goals. Payers always try to make the negotiations about them and what they need, don’t let that happen.
Providers need to establish their needs early on and support them with data & analytics.
The contract negotiations game today is “stacked” to tip the scales in the favor of payers.
Payers have become used to dictating terms to providers and then waiting out the clock. Payers are expert negotiators with an army of experienced contractors and analysts. Payers are pre-programmed to play hardball and have an endless list of reasons why your request is not possible.
So how do providers tip the scales in their favor and get a fair contract? The term we use is Leveraged Negotiations.
What are leverage negotiations? Simply put, it means negotiating from a position of strength. It means controlling the process, it means being resolute, it means having full enterprise alignment before you start your negotiations.
You have more leverage than you realize.
We can help you find it.
5 keys to negotiating from a position of strength
Start Early
You should be starting your negotiations 12 months prior to the end of your current contract.
Data & analytics
Everything you do should be fact based, your story and your ask. Parity among payers, parity with other providers, past increases all matter.
Strategy
Every situation is unique, have your strategy mapped out before starting your negotiations
Goal Setting
Add your pricing strategy. Be sure to include important details like value, length of service, and why it’s unique.
Leadership Alignment
Hard negotiations can get ugly, you need your leadership behind you
Our Leveraged Negotiation Tactics
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Anchor on Data & Facts
Critical component
Data must be accurate
Credibility is at risk
Speed is crucial
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“Side of the Angels”
Providers save lives, take care of people
Payers never win in a public battle
Fair reimbursement
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Be Consistent
Be resolute in your approach and ask
Your core ask and reason should not vary from day one
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Escalate Quickly
Payer contractors have limited authority
“Best & Final” will come from the plan leadership
Don’t let payers slow walk the process
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Pain & Leverage
Payers react to leverage & pain
Moving patients is your ultimate leverage
Actions speak louder than words…don’t bluff
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Patient Retention
Leverage Government programs
Engage key community stakeholders, regulators, brokers & employers
“Patients First” in all you say & do
Articles proving our approach works
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Could contentious payer-provider negotiations become the post-COVID norm?
A recent article, written during the negotiation, highlighting our work in action supporting Bon Secours Mercy Health payer negotiations with Anthem BCBS.
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Bon Secours Mercy Health, Anthem reach contract deal following monthslong spat
Another recent article, written after the conclusion of the deal, highlighting our work in action supporting Bon Secours Mercy Health payer negotiations with Anthem BCBS.