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Medical Management Associates
Ask-A-Consultant: Fee Schedule Negotiation
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Date: 09/13/2000
Q:
When I first signed managed care contracts several years ago, I was able to
negotiate reimbursement for my top volume procedures. My office manager now
tells me that she is not able to negotiate reimbursement as each plan has a
“standard” fee schedule for all physicians. Is this the case and can I do
anything to increase my contracted fees?
A:
Depending on your location, your office manager is most likely correct. While
in the network development phase, many managed care plans would negotiate fees
for specific physicians and/or practices in order to quickly build a network
capable of serving their beneficiaries. As managed care plans develop sufficient
provider networks in their targeted geographic areas, they implement standardized
contracts and fee schedules and are much less likely to negotiate fees and contract
terms. Because they have a large number of physicians willing to accept their fee
schedule, they do not feel it necessary to reimburse a small number of physicians
at a different rate. In addition to the financial reasons, this strategy simplifies
administration of contracting and claims payment. Your situation is a good example
of the benefit of negotiating fees early in developing managed care markets and
including provisions to limit the plan’s ability to arbitrarily reduce fees in
the future.
Of course, you should always attempt to negotiate your contracts. If you or your
practice represents the only source of care in your specialty in a specific area
or at a contracted facility, you may have increased bargaining power. In addition,
many large groups (PHOs, IPAs) have been successful in negotiating contracts with
improved terms due to the number of physicians represented by the group. If you
are a member of an IPA or PHO, group contracting may be a valuable strategy to adopt.
Holly H. Howell
Associate
MMA does not provide
legal, accounting, or tax advice. If you need assistance in these
areas, we recommend that you consult a qualified professional. In
addition, please note that a client relationship with MMA is not established
by the submission of a question to this forum or by the publishing of MMA's
response.
