Latest / Off the Chart: A Business of Medicine Podcast / S1 Ep39: Negotiating with payers with Scott Dewey, chief managed care officer at PayrHealth
Transcript
- Scott Dewey 00:00:00 You have one lawyer that you can call. It's not how many lawyers they have, it's how many floors of lawyers they have. Keith Reynolds 00:00:12 Welcome to Off the Chart with Medical Economics, the podcast featuring lively and informative in conversations with healthcare experts, opinion leaders and practicing physicians about the challenges facing doctors and medical practices. I'm your host, Keith Reynolds, and today we feature an interview between Medical Economics managing editor Todd Shryock and Scott Dewey, chief managed care officer at Pear Health. I hope you're strapped in because they're digging deep into the best tips and tricks for pair negotiations. Todd Shryock 00:00:41 All right. I'm here with Scott Dewey of Payer Health to talk about negotiating with payer. Scott, how are you today? Scott Dewey 00:00:48 Good afternoon. I'm doing great. Todd Shryock 00:00:50 Great. Thanks for joining me. So when physicians are entering into payer negotiations, where should their preparation start? And maybe when should their preparations start? Scott Dewey 00:01:03 Well, the easy answer to that is you always start with a strategy. the the worst thing you can do is become reactive. the players have a game plan that it's it's well defined and well practiced, and it's it's set up according to rules they've designed. Scott Dewey 00:01:22 So you want to think things through. You want to know your strengths. You want to identify what leverage opportunities you've got. you want to know the the player's vulnerabilities. Believe it or not, players do have vulnerabilities. knowing the players motivations is really important. What are they working on? Are they introducing new products? Are they doing a service area expansion and they really need you for this product? Even though you're talking about, the maybe a commercial product, maybe they've decided to get into the exchange or they're bidding on a medicaid product. they they might need you for that product, and you can use that to to your advantage. When you're talking about the commercial product, which might be the provider's goal. they there are network adequacy standards, for specifically for Medicare Advantage, but other products as well. There may be key employers, especially the big ones that they already have, or they're trying to, to bid on, having network disruption, at a key time, very damaging to them. And they really want to avoid that. Scott Dewey 00:02:30 they may be very focused on value based care, and knowing what your advantage is, what you bring to the table can be an important part of that conversation. market share. So another, good component. but and that applies to your market share as a provider and to their market share as a payer. and you can still use that to your advantage if, you're the the the big fish. Great. You've got live rich. If you're the small fish, you want to to tell them you're trying to preserve competition. The worst thing that can happen in their mind is, consolidation on the provider side, if you go out of business or get bought by the big fish, all of a sudden their job gets a lot harder and their costs go up. So it's really in their best interest to keep you viable as a provider, to keep you competitive. and you can frame the debate in that way. but part of your strategy also should be to know what your secondary assets are. The primary almost always is. Scott Dewey 00:03:36 It's about the money. Right? so but sometimes you're not going to get what you wanted. There are still wins, that you can get out of it that aren't necessarily tied to what is the negotiated reimbursement rate that can be contract language, it can be operational concerns. There's, other ways to come out with a win. Todd Shryock 00:03:57 How far in advance should you start preparing for the negotiation if you were a provider? Scott Dewey 00:04:04 that is a good question. And the answer is many times it is in healthcare. Is it depends. depending on the situation, depending on your leverage, depending on the product, knowing the calendar is honestly really important, knowing when open enrollment is, and kind of backing up the calendar from there, can, you know, really put you in a much more advantageous spot. So, the last thing you want to do is wait till the last minute. Of course. So again, as part of your strategy, you know what the termination clause might be? You know what? The notification clause, how many, you know, months, weeks. Scott Dewey 00:04:44 sometimes years in advance. You need to notify them of your intent to renegotiate. these these are all considerations that go into that strategy. Todd Shryock 00:04:54 Physicians obviously don't enjoy negotiations. They want to practice medicine. But the temptation would be to take a longer contract is if it's offered, is a longer contract better than a shorter one? Scott Dewey 00:05:11 Unless you have a really favorable contract that you want to lock in for a long term. shorter is better. I prefer one year, that that, things change frequently. the payers want to lock lock you into long term contracts, where they can dictate the terms. But a doing that prevents you from being able to renegotiate when things change. market conditions change, competitive conditions change. fee schedules can be changed. technology changes things. You know, that used to cost. I hear there's so many times this supply, whatever it is, used to cost me this and that costs not 20% more costs three or 4 or 5 times more. And all of a sudden that contract that I signed three years ago, which was fine, I'm losing money on every patient that I see. Scott Dewey 00:06:05 If you're locked into a long term contract, there's nothing you can do about it, and they're not going to give you any relief until they have to, based on the contract, there can also be, you know, regulatory changes that that change the dynamic. All that to say, if you are on, you know, a once a year, I think you should be able to assess and, talk to talk about terms with the Bayer. Todd Shryock 00:06:30 So many of these payers are multibillion dollar companies with, you know, a small army of lawyers to help them negotiate all kinds of expertise. How much negotiating room does a smaller medical practice really have with these corporate giants? Scott Dewey 00:06:47 And you're right, I've used that to, Vision before that visual to say you have one lawyer that you can call. It's not how many lawyers they have, it's how many floors of lawyers they have. And I'm not. I'm not kidding when I say that there there are literally, you know, just cubicles, you know, in offices on multiple floors, all with a very specific, focus. Scott Dewey 00:07:12 So, that you're right, the deck is clearly stacked against the providers. you know, their pockets are way deeper than any providers are going to be. But contract negotiations, it's a leverage game. And even small providers, you you can identify a leverage point potentially, that can alter that power dynamic. maybe you, provide a unique service. there there are a number of providers that don't realize that a service they provide is is really critical, because CMS requires them to have, you know, for this population, you need three of, you know, fill in the blank or even a part of their practice. A pediatrics is a struggle sometimes for for payers when they're putting together their network adequacy, documents. And the fact that a practice says, oh, yeah, by the way, we we also serve child and adolescent patients as part of our practice. It's not the majority, but we can, that that can be a game changer in the in the conversation. Keith Reynolds 00:08:24 Oh, you say you're a practice leader or administrator. Keith Reynolds 00:08:27 We've got just the our sister site Physicians Practice. Com your one stop shop for all the expert tips and tricks that will get your practice really humming again. That's physicians practice.com. Todd Shryock 00:08:42 I'm for some practices say I can't negotiate. They just give me a contract and you say, take it or leave it. Do you have any advice for them? Is there any way to get around that? Scott Dewey 00:08:54 I cannot tell you the number of times I've gotten a proposal that's best and final, or even this contract is not negotiable. things are not negotiable until the player's persuaded that. Hey, the negotiation that we're or the deal that we're offering you, is in your best interest, sort of reframing the discussion to show the payer. Hey. What? I'm what? I'm talking to you about what my practice brings to the table. This proposal I'm bringing you. it's actually in your best interest. It's going to lower your overall cost. It's going to change your air rate. you know, something that that reframing that, it's miraculous how, these are not negotiable. Scott Dewey 00:09:36 Become negotiable when it's in their interest. Todd Shryock 00:09:40 What about prior authorizations? Those have become the bane of so many physicians and patients alike. Is that something you can negotiate some sort of limitation into in in a contract? Scott Dewey 00:09:53 Sure. even with massive amounts of leverage, you're never going to get it removed. that's that's the payers bread and butter. They've, they've told their, their customers and they have customers, right? They have employers, they have the federal and they have the state government. We're watching the store. We're not just going to pay any claim that comes through. We're only going to pay things that are medically necessary. And they have a justifiable obligation to say, let's take a look at this before we pay the claim or before we authorize it, or and the authorization process prior to, but sometimes after the fact is, is the way to do that. With that said, you're not going to get rid of it, but you can add some guardrails around things like turnaround times. if if you ask for an authorization and they take weeks to do it, it's bad for patient care. Scott Dewey 00:10:43 it's just bad all the way around. Hold them accountable for a reasonable turnaround time to at least get you an answer. there are things like, peer to peer review. if if you if the provider disagrees with the decision. Third party reviews. to that you can appeal an adverse decision to, allowing for medical necessity appeals if the authorization wasn't obtained prior to the service, which isn't always possible. Of course. you don't want them to make a decision. That's what I call administrative only. Well, you failed to do this administrative thing. Therefore, we're just going to deny we're not even going to look at it. Require them to make that decision based on medical necessity criteria. retrospective denials is something I like to put in my contracts to prohibit, what I, what I call Monday morning quarterbacking. you can't authorize a service. You provide the service, and then they look at it and decide what's it medically necessary? That's just not acceptable. So you can you can add these things to your contracts. Scott Dewey 00:11:48 And there's one other way which I honestly think is the best way. And it's more process driven. And that's what's called gold carding. I think if you've heard the term, most payers have some version of that, that, that you can demonstrate your denial rate for my practice for my hospital is is very low. It's less than 5%. It's less than 10%. And as if and if they can verify that then they will quote unquote turn off prior authorization for your for your practice for your tax ID number. Todd Shryock 00:12:20 How common is it for payers to have contract language? How about being able to unilaterally amend the contract and should have payer ever be allowed to do this? Scott Dewey 00:12:31 Oh, unilateral amendments are absolutely standard boilerplate language. Now, and the payer will assert that they have to have this, so that everybody is is treated, you know, the same. And that's how they maintain regulatory compliance. They'll they'll claim, you know, they'll play the victim and say, we couldn't possibly administer our health plan unless we can change your contract. Scott Dewey 00:12:55 and you can concede for regulatory limit that language, okay. You can unilaterally amend solely to comply with applicable regulations. But beyond that, mutual written agreement is going to be required. And remember provider payers excuse me. Remember, payers can change things unilaterally in ways that aren't just contract language. they can change. They can and do change all the time, their policies and procedures. at least make sure that you have in the contract that they're required to notify you of those changes. I see language all the time. That provider shall comply with, policies and procedures that they know or should have known. I love that one. make sure that they notify you so you're in a position to assess and challenge them on those changes because they can be onerous. and if, if, if you challenge them, if enough people challenge them, they, you can get them to back down or at least talk to you about alternatives. Todd Shryock 00:14:03 What are some common contract mistakes? You see, physicians agree to boilerplate languages. Scott Dewey 00:14:11 The ones that they send out, are just chock full of language that's completely one sided toward the payer. Scott Dewey 00:14:18 If there's a restriction on the provider, then you should ask the payer to abide by the same terms. If they have a time limit for you to contest, underpaid claims of six months, then the the, the payer shouldn't be able to recoup an overpaid claim for the same time period. what's good for the goose is good for the gander. and I've had some pretty good luck, you know, making that case that. Let's agree on a time period we can both live with after. After which we just we both get to close our books and move on instead of years after the fact. Somebody's coming back and pulling that back. Does the provider have an obligation to get the claim and timely? Sure. But there are extenuating circumstances that are beyond the provider's control that that can be, noted in the contract. if there's a timely filing limit, the payer should have a prompt pay time frame as well. Things like that. Defined fee schedules. that's that's another bugaboo. the quote unquote fill in the payers name, market fee schedule. Scott Dewey 00:15:31 That means they can decide what that is, and they can decide that it's 20% less than it was yesterday. I like to tie things to a third party fee schedule. Medicare allowable is a common one. That's not to say that Medicare doesn't make changes, but they tend to be less arbitrary, I'd say. and of course, like we talked about earlier, rates, you know, they're not the only important part of the contract. Language is important, too. So a common mistake is to say, oh, I got that fee schedule I wanted, but I didn't fully read all that language in there. And they they give with one hand the fee schedule and they take away with the other hand based on, administrative policy. Richard Payerchin 00:16:16 Say, Keith, this is all well and good, but what if someone is looking for more clinical information? Keith Reynolds 00:16:21 Oh, then they want to check out our sister site, Patient Care online.com, the leading clinical resource for primary care physicians. Again, that's patient care online.com. Todd Shryock 00:16:34 When so many contracts leaning more into value based care. Todd Shryock 00:16:40 Is there anything different about a value based care contract? Physicians need to be aware of compared to a traditional fee for service? Scott Dewey 00:16:48 Oh, absolutely. and value based contracts that that's just become such a generic catch all term for, you know, a whole array of programs ranging from non what I call non contractual programs, where you just sign up for you're not negotiating or signing an agreement, it's just available to you if you do this, fill out this form, close this care gap, we will provide this financial reward. and those are great programs. by the way, there's usually no risk associated with them, so absolutely. Take advantage of that. all the way up to, you know, population management arrangements where large provider groups, integrated delivery systems, agreed to take financial responsibility for the total medical spend for a large cohort of patients. So you know that each of those and from those extremes to to the in the middle. pay attention there. There's a lot of revenue associated for it. And a lot of these programs are certainly designed in ways that, do benefit the patients and do change bend that cost curve while improving outcomes. Scott Dewey 00:17:58 But there are also plenty of metrics, that they will call quality, but, really are about, saving the, the payer money as opposed to improving outcomes, you know, formulary compliance. That's purely a financial consideration, not a quality one. where the targets, the targets that the metrics that have been chosen and the targets that you have to to achieve under those metrics, that's definitely something to pay close attention to. many of them, quite honestly, I believe are set too high. They're based on CMS scores for star scores, and five star. That's a great goal to have. it takes time and expertise to get there. You can, many times, negotiate which metrics you're going to be judged on or held accountable for to get that reward and where the targets are that if five star is 90%, and you're at 50%, that's that's such a big leap in the first year. Many providers will just shrug their shoulders and say, well, you know, why bother trying? I'm never going to get there so you can negotiate, you know, kind of a tiered approach. Scott Dewey 00:19:15 Hey, in the first year, I'll get to 62nd year seven, you know, over a period of years. Yeah. Let's get to 90. all these things are potentially negotiable, but you have to read the the programs. You have to get to know the details. I'm sorry. One last point on that, too. many contracts allow the player to, change those targets to change those goals mid program year, which is completely unfair. If you establish the goalpost, you don't get to move the goalpost. Todd Shryock 00:19:44 Is there anything else physicians need to know about contracts? Scott Dewey 00:19:48 I would say get it in writing. Make sure it's in the contract. Many times you'll be assured. Oh, no, no, no, we never do that. Or we always do that. Or our policies and procedures say that, at the end of the day, verbal assurances, emails that reassured you of things, these have no legal force. It's all about what the contract says to protect yourself if it's important to you, if it's important to your practice, your facility, make sure you get it in the contract. Scott Dewey 00:20:22 I'm trying to think payers are always updating their contracts and adding language that benefits them and restricts the providers, so just don't assume that this new version of the contract or the renewal document is the same. payers will sneak in. We call them Easter eggs. You can call them trapdoors. You can call them land mines. and sometimes it's only one line that got added, but it may be significant. All that to say, read every line. You know, don't assume. there's another new one that I'm seeing a lot in payer contracts. and that's the payers effort to address consolidation now that they've consolidated on the payer side. They're very big and very powerful. Powerful. making sure that the providers can't do that as well is something that they're putting into the contracts now, restrictions on any change to the the nature of your practice, your facility, so that if you merge with or add or acquire or are acquired by the payer has the right to say if if both parties have had contracts at different terms, we the payer get to decide which one to pay you under. Scott Dewey 00:21:37 I would highly, heavily advise, resistance to that. Todd Shryock 00:21:43 Great. Scott, thanks for joining me today. Scott Dewey 00:21:46 It was my pleasure. Good to talk to you, Tom. Keith Reynolds 00:21:54 Again, that was medical economics managing editor Todd Shryock and Scott Dewey, chief managed care officer at Payer Health. My name is Keith Reynolds, and on behalf of the whole medical economics team, I'd like to thank you for listening and ask that you please subscribe to the show on Apple Podcasts, Spotify. Also, if you'd like a digest of the best stories Medical Economics publishes delivered straight to your email six days a week, subscribe to our newsletter at Medical economics.com. Thanks.