Latest / Off the Chart: A Business of Medicine Podcast / S1 Ep152: The secret to winning payer negotiations, with Doral Jacobsen, MBA, FACMPE, of Prosper Beyond VBC
Transcript
- 0:00 When you choose Copic, you're not just getting industry leading medical liability insurance, you're getting a true partner, one that's here for you every step of the way. Need quick answers? Our physicians are just a phone call away on our 24/7 hotline. You'll get specialty specific support and proven resources built on decades of experience. C O P I c.com We're Copic, here for the humans of healthcare. Here for you, 0:24 payers have nothing without a network, and I think practices often feel like they don't matter. They don't have a voice, but we see practices winning every day in negotiations, because payers do need you, you 0:43 Welcome to Off the Chart, a business of medicine podcast featuring lively and informative conversations with healthcare experts, opinion leaders, and practicing physicians about the challenges facing doctors and medical practices. My name is Austin Luttrell. I'm the Associate Editor of Medical Economics, and I'd like to thank you for joining us today. In today's episode, Physicians Practice Managing Editor Keith Reynolds sat down with Doryl Jacobson, CEO of Prosper Beyond BBC, and they're talking about why so many practices feel defeated before payer negotiations even start, and what to do about it. Dory walks through how to actually use price transparency data without getting trapped in a numbers debate, which contract terms beyond the headline rate tend to move the needle the most, and what a strong case looks like in the room. They also cover how negotiation strategy shifts depending on practice type, the questions worth asking payers early in any discussion, and why knowing your worth is the foundation of everything else. With that said, Dory Jacobson. Thank you for joining us. Let's get into the episode. 1:42 Hello there, folks. Today we're talking to Doryl Jacobson, CEO of Prosper Beyond BBC. How you doing today, Doryl? 1:48 Doing great. Nice to be here. 1:50 Glad to hear it. Glad to hear it. So, let's dig right in. So, when practices say they feel defeated going into payer talks, what is usually driving that? Is it a lack of leverage, a lack of clarity on what to ask for, or poor internal alignment. 2:05 That is a great question. I would say, first of all, what we typically see is a poor track record. So, we might have had a negotiation that didn't go very well. We're going to make the assumption that this is difficult across the board. That's not necessarily so, but I think that that definitely creates anxiety and a lack of interest in pursuing other negotiations when it hasn't gone well. Also, no strategy. Most practices that we work with haven't identified or articulated or really understand what it is that they want in the short term and the long term. So, what this does is it leads to a lack of confidence to not really sure what it is you're asking for, and how to do it, and that can lead to fear of rejection, because if you don't have a strategy and you really don't, you don't have confidence in your position and a plan, then of course it's going to lead to how is this going to go, so the fear of rejection comes in as well, so all of those things come in together, and then lack of clarity. This is another piece that's really important to note. So many practices don't really know how their contracts are performing. Period, they're not sure what their reimbursement rates are, they don't understand the implications from a language perspective, and it really is difficult to establish a starting point if you're really not sure where you are from a landscape perspective, you know. For example, I had a client in Florida not long ago when they retained us, they said our worst contract is with payer A on the Medicare Advantage side, and we said, well, let's check it out. We did our assessment. They've got about eight contracts on the Medicare Advantage side. That definitely wasn't the worst. It was actually in the middle. They wanted to terminate that contract, so it really changed the strategy, and it was interesting because at the end they ended up terminating that contract because it became the lowest Medicare Advantage contract. But it's really important to do your homework, and a lot of practices haven't done that, and that impedes their ability to effectively deploy a contracting strategy. 4:09 Alright, so you know, how should a practice use the price and transparency data that they've got without getting trapped in a sort of, here are our numbers debate, you know, what's smart way to use to translate that data into an actual, like, you know, leverage within negotiations. 4:26 That is a great question. You know, transparency data is interesting to use. Payers are using it. We see payers using it against practices all the time now. So you have to be educated, right? Number one, what we like to do is take a look at the aggregate percentage of Medicare across your top codes, because one rate in and of itself is kind of meaningless. You need to look at it in the context of the larger practice, so you want to look at calculating it in terms of RBA RBS. You also want to take a look at. What that means from a competitor perspective, so take a look at your competitors, and then also take a look at all payers. So, if you're working with one payer, you want to look at, like, your top payers and compare all of that across the payers. So, it's great to see how you're performing, how your competitors are performing. That's going to give you a landscape, but here's the deal with the tick data: it doesn't tell the whole story, not by a long shot. It all it does is it gives you a snapshot of a rate in time. It doesn't actually give you good information about edits, how they're eroding revenue for a practice. It also doesn't give you any information about administrative burden, you could be getting clobbered on the administrative burden side, that is increasing your expenses and eroding the profit from the contract. Also, payment policies can plague practices. We see this happening right now with down coding. This is definitely impactful, because your rate might be $100 on an E and M code, but in fact you're getting paid 75 It's not going to show up in the transparency data. Also, value-based revenue that does not show up in transparency data and denial. So, transparency data is super limited. We don't really think it's useful, but boy, is it being used as a big hammer on the payer side, and here's the real kicker: it's kind of meaningless, right? Who are we comparing us to? Other people who aren't probably doing a great job negotiating either. Independent practices is really tough. So, is that our bar? No. Here's what we really want to look at: who could acquire our practice. You want to take a look at, if you were acquired, what would the expense be to the payer? So, the data can be useful if you use it that way. The way that we look at it is a small increase for a practice, say 10% is nothing if they're saving 30% in total cost of care downstream. That's really the argument. So, this transparency and coverage data is very limited, but you can use it to your advantage. I think the key takeaway here is you've got to know your worth. What are you doing when you zoom out from a total cost of care perspective? And this data can help you check that out. 7:13 Good advice for practices, good advice for individuals. Know your worth. So, what contract terms beyond the headline rate tend to be the most undervalued when it comes to, or but can meaningfully improve revenue, cash flow, or administrative burden. 7:29 That's a great question, too. I think one of the things to think about from a practice perspective are escalators. It is a monumental effort negotiating a payer contract. If you're in a contract and you can get a multiple year deal with escalators on it. All you're doing is making sure that they honor that, and it's going to help you keep on top of it, and also, you know, lengthen the time in between negotiations, because that can be a lot of effort. So that's one thing. Administrative burden, put this in your proposal, there are times when a payer will believe some of that burden, and that really brings the overall value of the contract up and helps you from a revenue perspective as well, and it helps your team. Unilateral amendments, making sure that payers cannot amend your agreement without your consent, if it's for non-regulatory purposes, is really, really important. Otherwise, you can get these love letters that are very problematic and are changing your rates and adding products that you might not have any interest in. So, make sure you have a say. And termination, I think this is one of the most important clauses. You should be able to exit that agreement within a reasonable time period, 90 days without cause at any time, then what we say to payers is we don't anticipate we're going to terminate, but if we needed to, we need to be able to exit this agreement within a reasonable time, and this is what we have with other agreements as well. All 8:53 right, so let's get into a little bit of a verbal jujitsu. You know, what's the best questions to ask a payer early in the negotiation, sort of feel out where the flexibility is on rates, risks, arrangements, utilization management, and operational terms. What should they be asking? 9:13 I have a couple of questions that we like to use, and it depends on the context of the meeting, but in general, here are a couple nuggets that we like to use. One is, if we, if our practice was acquired by System A, how would that impact the total cost of care? I mean, these are things we already know the answer to, but it's a good question to ask, because it's going to get the payer to be thinking about that. Another one is, and you might use this down the line, but it's really effective. Is what can we do to protect us all against contract termination? We don't want to terminate our contract. What can we do to work towards not terminating this contract if it's getting hot? That's a good one to use. Another one would be, would there be an. Network adequacy issue, if our practice were no longer in network, and this is really important, because it's all supply and demand. How badly do they need you, or is it going to cause a hole in their network? Are they going to experience any problems if you were no longer in the network? So, those are some really good questions to ask. 10:20 All right, so excuse me. Sorry, so how do you recommend that you know practices set in sequence their asks over time? You know what should be introduced first versus held until later, so that they're not giving away their leverage, you know, too soon. 10:36 Yeah, first establish a strategy, so really take some time to completely understand your contracts, how they work, when your renewal dates are, what you're actually being paid today, what products you're in, everything. Do a deep dive, understand that, figure out how administratively burdensome the practices are, and what reliefs you can ask for. Payment policies, do a really comprehensive review to make sure that you understand your starting point. Then establish your short term and your long term goals, and then you can back into negotiating contract. Our best performing clients are always negotiating contracts, because prices are always increasing, staff always need raises supply costs, is they're always going up, so you have to constantly be asking payers for increases to cover inflationary expenses, so the cadence is pretty frequent, but once you get into a rhythm, we look at how long did it take us to negotiate this contract. I was just actually on a client call right before this call, where it took us about 14 months to close a deal, we're going to start a year in advance for the next round, because it took us that long to do this. So, just be aware of that, and you should back into those dates accordingly. Some payers are quicker than others, but that really should be the cadence from a sharing perspective. You want to first share your value proposition. It's much more effective to share who you are and what you do for the payer, and then provide your proposal than the reverse, because you want to give them information to so that they can advocate for this increase, and they will. You know, we have lots of relationships with payers, as one of our strengths is helping, making it payer facing, so the things that you're telling the payer are going to resonate if you're reducing readmissions, for example, that's a big cost for payers, they like that, reducing emergency room visits. How was happening from an access perspective? Do you have open slots in your schedule? I had a client the other day that was talking about Saturday hours. This is great, because every time an emergency room visit is doesn't happen, it saves the payer lots of money and increases patient satisfaction. So that's really, really important. Also, be thorough in your proposal, so first value proposition, and then provide your proposal, but be thorough. You don't want to have the backdrop and say, "Whoops, I forgot to add that we want an increase on our Medicare Advantage side. That really points back to the homework. If you do a thorough contract summary and you understand your products, your rates, how everything works. You can make a comprehensive ask. Otherwise, you'll be negotiating against yourself a little bit. So, do a really good job up front, and that will help you. 13:40 Hey there, Keith Reynolds here. And welcome to the p2 management minute. In just 60 seconds, we deliver proven real-world tactics you can plug into your practice today, whether that means speeding up check-in, lifting staff morale, or nudging patient satisfaction north. No theory, no fluff, just the kind of guidance that fits between appointments and moves the needle before lunch. But the best ideas don't all come from our newsroom, they come from you. Got a clever workflow hack, an employee engagement win, or a lesson learned the hard way? I want to feature it. Shoot me an email at K reynolds@mjlifesciences.com with your topic, a quick outline, or even a smartphone clip. We'll handle the rest and get your insights in front of your peers nationwide. Let's make every minute count together. Thanks for watching, and I'll see you in the next p2 management minute. What does a strong case look like in the room? You know, what's the mix of data, patient access, you know, market context, operational realities? You know, what is actually going to change, you know, how the payer behaves. 14:43 Here's what it looks like when we have a dream situation on our hands. It looks like this: they have decent rates with competitors. If they don't, they are fixing it, because sometimes a payer will ask you, why would I give you. So this rate we see you're accepting these lower race news other payers, and what we like to say is we are working on that. That is not going to be happening, you know, in the next 12 or 24 months. That's number one. Number two is they have a strong position in the market, so the payer needs them. There's an adequacy issue, meaning if the payer lost them, well, the payer can't lose them. They have to have that group. It's going to cause them some pain. Customers want the practice in the network, and this we see this with PS, we see this with OB-GYN, primary care. The last thing a payer wants is patient disruption. So, if that's going to be a pain point, that's going to be a problem for the payer. Strong ratings, it's really unfortunate sometimes when we are working with a client and the payer says, well, their quality scores are not very good, and their total cost of care is above peers. You have to do your homework on yourself too, because the payers know this, and it strengthens your position. For example, premium care designation, that means that United Healthcare has vetted the practice and has established that they are a high quality provider, and they do a good job from a cost efficiency perspective. It's, it really makes it a lot easier to negotiate, because they've already pre-vetted you, and we know that practices do not take treat a united patient different than a Cigna, different than an Aetna, so we use that across the payer landscape. So that's really important. If they have good ratings, that is really, really good. Also, if they can clearly articulate their value proposition, so they know just like that, here are the five ways that we help you, that is really important, and if we have an engaged clinician, that's awesome. We like to say, like a slightly irritated, but very familiar with the payer side, who can articulate their value and give a few stories that help the payer understand the value they bring to the network, that's a real good card to have in our hand, and then also a good relationship with the payer. You know, I know that this is something that a lot of practices struggle with, but having a good relationship with the payer starts with having discussions that have nothing to do with payer contract negotiations. You know, having a quarterly meeting where you're finding out what's happening in the world of Cigna today, what are some things that you're working on that might be of interest to us? How can we partner? How can we be a good partner for you? Having this relationship and these discussions, aside from the rate discussion, is very helpful as well. And here's the deal, when a practice understands its worth, they find their power, that's what we really see happening with our clients, they really find their power, they find out who they are, and they get brave, which is, you really need that in a negotiation, so you need to ask yourself the question, is this relationship in our practices long-term best interest, that's really what we're talking about when we're thinking about payer negotiations, if it's not what needs to change in order for that to be, and what's our walk away point. You really have to establish all of those things before you start the negotiations, really going to help you. 18:14 Seems so much preparation. It seems that a lot of this is done before you even get into the room. Really, 18:20 absolutely, it makes everything go so much better. Oh, 18:24 all right. So, you know, how do negotiation strategies differ by practice type? So, primary care, specialty care groups, ambulatory surgery centers, FQHCs, and behavioral health. You know, what? What are the pitfalls that you know hit these, you know, particular, you know, subsections of healthcare, you know, how you know what's unique to them. Yeah, 18:48 I think on the primary care side, what we usually land on is they have the power of the click, the primary care, wherever they're sending people for imaging procedures, labs, etc. There's a lot of power in where they're referring, because the spend on the position size is very small, but it's very large on the inpatient side, and ancillary services. So, primary care, it's all about where they're sending patients on the specialty side, you know. It really varies. I'm working with a nephrology group right now, and it's all about HCCs, hierarchical condition categories. I mean, we're every time they're working hard on that, the payer benefits are enormous, but they need to share in that upside as well. So it's really particular on the specialist side, but the strategies can vary. Access is another important thing, I've got an ENT group in a very rural setting that access is a big issue, and they're one of the only games in town, so it really can vary on a specialty by specialty basis, but you got to dig into that and be able to articulate that, you know, on the ambulatory surgery side, every time we're not doing something impatient. It's saving money, so that in and of itself is a good thing. FQHC, you know, a lot of times is adequacy because they're big safety nets, and on the primary care side, they're doing a lot from a preventive medicine side, so that is really, really helpful, and something that is great from a payer perspective and a patient perspective, so we lean into that on behavioral health. It's all about the levels, meaning you've got, you might have a rate, but that rate could be there's a multiplier if it's for a master's level versus a doctoral level, so you need to pay attention to those multipliers, because that can kind of bite you on the behavioral health side. Pitfalls, honestly, are pretty similar. The biggest pitfalls are we cannot get response. How do you deal with that? You've got to escalate, you've got to go around the people who are not being responsive, also not getting proposals that are big enough, fast enough. I mean, all the pitfalls are really pretty similar, I'd say, across all of the specialties, because they, you know, they're always.. if it's not good for a specialist, it's probably not good for a primary care, and it might be good for the payer. So, the pitfalls are pretty similar across all of them, but the strategies do vary. 21:21 All right. So, what are the repeatable, you know, negotiation moves that consistently work across markets? Like, what's the language, visuals, or frameworks that help practices stay structured and avoid getting sidetracked by, you know, payer tactics? 21:37 That's an excellent question. Value proposition, you've got to have a visual, something really simple, think one page sales slick, your practice, it's got to have the following information, nuts and bolts, the clinicians, the services that you provide, office locations, all of these things are going to help the payer remember who you are and where you are, and that's very helpful. And then your value, how you're a good steward of the healthcare dollar, satisfaction ratings, your mission statement, that's important as well. And then take a look at their HEDIS measures and see where they're lacking and where you might be able to help them, and tell the story about how your practice is really helping from a healthcare perspective. Goals the payer has as well, so take a look at that. Do a complete language review. You've really got to read the whole agreement these days, because we find weird things in sections that you wouldn't expect. I mean, the other day we found we are going to accept your allowable, or 60% or we're going to either pay you the allowable or 60% of your bill charge, whichever is lesser. And it was not in the rate appendix, it was in another area of the contract. So you really have to take a look at the contract closely, establish a strategy first, so that you can be proactive instead of reactive, because the place that you don't want to be is you get a love letter from a payer, and then all of a sudden you're just trying to claw your way back to equal to current rates, and we see that happen. So, if you have a relationship and you're being proactive, you're preemptively protecting against that. Do your homework and know all your terms. Follow a reasonable rhythm. If you're asking a payer for an increase, give them a due date. Follow up after that due date. But payers have internal protocols. Contracts don't get loaded immediately. These things can be really annoying to a practice, but if you are conscientious and really tenacious, and are following up, it will get done. We get it done all the time, but just I think accepting it'll take longer than you think it should, and a lot of it has to do with their complex systems. 23:54 Alrighty, so this is physician's practice. We're all about the tips, so you know what's one tip you would give a practice leader that they can implement, you know, today, maybe not today, let's say this week. 24:05 This week, start now, because payers have nothing without a network, and I think practices often feel like they don't matter, they don't have a voice, but we see practices winning every day in negotiations, because payers do need you, what they're selling is a network, and if you just pick a contract and start to work on it, we see folks having successes all the time, and it doesn't happen, you know, you miss 100% of the falls that you don't swing at. 24:38 Thank you so much, Jerome. It's been a pleasure. 24:40 Okay, thanks 24:46 once again. That was Doryl Jacobson, CEO of Prosper Beyond BBC, speaking with Physicians Practice managing editor Keith Reynolds on behalf of the whole Medical Economics and Physicians for Access teams. I'd like to thank you for listening to the show, and ask that you please subscribe, so you don't miss the next episode. Kate, as always, be sure to check back on Monday and Thursday mornings for the latest conversations with experts sharing strategies, stories, and solutions for your practice. You can find us by searching Off the Chart wherever you get your podcasts, and if you like the best stories that Medical Economics and Physicians Practice publish, delivered straight to your email six days of the week, subscribe to our newsletters@medicaleconomics.com and physicianspractice.com Off the chart, a business of medicine podcast is executive produced by Chris Mazzolini and Keith Reynolds, and produced by Austin Latrell. Medical economics and physicians practice are both members of the MJH Life Sciences family. Thank you.