Why Payer Contracting Management Is Necessary for Your Healthcare Practice

Why Payer Contracting Management Is Necessary for Your Healthcare Practice

Every healthcare provider has to contract with insurance providers—almost always more than one. No two of these contracts will be identical. Different providers will have hidden clauses, different payment schedules, and other variations that make the process of managing accounts exceedingly complex.

What Makes Payer Contracting Difficult?

The differences between one insurance provider’s way of handling things and another’s is fully intentional, on their part. Payers will frequently change contract terms to improve their revenue at the expense of healthcare providers. This is a legal maneuver that is generally permissible, albeit unpleasant.

Because payers differ in their compensation rates, payment schedules, shift their requirements frequently, and employ confusing language—unique to individual companies—an effective payer contracting management strategy is the only way to ensure that you’re being treated fairly by each payer. By keeping track of your payers’ reimbursements over time, you are able to see the bigger picture of how each company is actually working for you.

How to Track Payer Contracts

The goal of tracking your payer contracts over time is to renegotiate your contract terms more successfully at regular intervals. It will also give you a better working knowledge of what to watch out for in contracts with all potential payers.

Examine Contracts Fully

Much is hidden in the fine print of your contracts. Make sure to read all contracts with all payers fully, so that you understand the details which can dramatically affect your overall bottom line with each payer. Keep an eye out for things like:

  • Limits on the amount of time you have to submit a claim.
  • How long your payer can delay reimbursement.
  • What are the terms of a managed care contract, and which services are covered? (Make a comprehensive list of services for each payer.)
  • Reimbursement rates for all provided services.
  • How disputes are negotiated.
  • Notice periods for renegotiation or termination of the contract.

By understanding these terms completely, you can create an effective prioritization of billing tasks and prevent underpayment or nonpayment.

Decode the Language

Hidden clauses and obscure language can undermine your ability to negotiate. It’s important to decode the awkward language in your contracts to ensure you’re getting the full picture of all terms and clauses. Keep an eye out for the following:

Unilateral Amendments

Appended with a notice period that typically ranges from 30–90 days, a unilateral amendment allows the payer to change important elements of the contract at will. A notice period of less than 60 days should be regarded as suspicious, as this is not usually enough time to fully comprehend a new set of terms. On renegotiation, you should seek to have unilateral amendments removed from your contracts.


Payers may also include language that allows them to change reimbursement rates at will. It’s important to determine which of your payers are ultimately offering the most favorable rates, and renegotiating better rates with—or leaving—other payers.

Network Requirements

Network requirements are renegotiated regularly by payers. As your patients use their network to choose a provider, it’s important that you ensure your participation in a particular network is not at odds with the requirements you meet. Most of the time, two main criteria determine the providers who are eligible for participation in a given network.

  • Credentialing - These are basic criteria, like adequate quality of care, all required diplomas and licenses, and a history of action in accord with the law.
  • Additional Criteria - Common additional criteria include having specialists on site, or having particular physicians available.

Additional criteria can change, leaving you ineligible for payment for reasons that may be arbitrary. You should seek to limit the payer’s ability to add criteria in your contract.

Build a Management System

Once you have understood all the terms of your contracts with all your payers, it’s important to have a centralized management system that allows you to keep track of deadlines, renewals, and auto-renewals specific to each contract. This should include the terms you intend to renegotiate at each opportunity to do so. Your goal should be to keep your terms as favorable as possible, while also making them as similar as possible between different payers.

Consider Outsourcing

Payer contract management is a time-consuming and complicated task, which is why many healthcare providers choose to outsource it. Healthcare Revenue Group is among the highest-rated options for payer contracting, with the knowledge to handle general medical practitioners as well as podiatrists and hearing healthcare providers.

As part of an overall billing services package, payer contracting is one additional way we help you to maximize revenue and grow your practice. Contact Healthcare Revenue Group today to talk about how we can individualize a comprehensive medical billing services package for your practice!

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