For behavioral health providers, working with commercial payers can often feel like navigating a minefield. Despite the potential for broader patient access and reimbursement security, the relationships between providers and commercial insurers are frequently strained by coverage disputes, low reimbursement rates, and complex billing issues. These challenges often lead providers to opt out of participating in insurance networks altogether, which can help them avoid the administrative burdens of navigating insurance but can also result in higher costs for patients who need services.
However, for those behavioral health providers who choose to engage with commercial insurers, success lies in negotiating carefully crafted, mutually beneficial contracts. Understanding the intricacies of reimbursement terms, the motivations behind seeking contracts, and the potential pitfalls in contract language is essential. This blog post will explore the advice shared by Polsinelli shareholder Jonathan Buck, who offers valuable insights into the strategies and best practices for behavioral health providers when negotiating contracts with commercial payers.
Understanding Your Motivation: Why Contract with Commercial Payers?
Before embarking on the often daunting task of negotiating with commercial insurers, it’s important for behavioral health providers to understand why they want to pursue such contracts in the first place. Jonathan Buck, who frequently advises healthcare clients on insurance contract negotiations, underscores the importance of clarity in motivation. The decision to contract with commercial payers should be driven by a clear understanding of the goals and priorities of the provider.
Buck’s first question to clients is simple: “Why?” While this might seem like an obvious question, the answer helps guide the negotiation process and ensures that providers focus on the aspects of the contract that are most important to them. For example, is the goal to provide more options for insured patients to access services? Is the aim to secure more favorable reimbursement terms, or to avoid the complications associated with being out-of-network or solely relying on private pay?
Answering this question helps behavioral health providers focus on what matters most when negotiating a contract. If a provider’s motivation is to ensure patients can access in-network services, the contract needs to focus on providing clearer terms for reimbursement, while making sure that coverage for services is adequate. Alternatively, if the provider’s primary motivation is to increase reimbursement rates or avoid out-of-network issues, the terms of reimbursement and network participation should be prioritized in the negotiations.
Past claims can provide valuable insight into what has been problematic in the past. If a provider has faced frequent claim denials or issues with specific aspects of coverage, those pain points should be addressed upfront in the contract. Buck advises that understanding past claims issues, such as denials due to covered benefit limitations, coding issues, or disagreements over clinical definitions like medical necessity, is essential to effectively negotiating terms that will reduce these obstacles in the future.
Prioritize Contract Language, Not Just Reimbursement Rates
While reimbursement rates are often the focal point of contract negotiations, providers must not overlook the broader impact of contract language. According to Buck, many behavioral health providers make the mistake of focusing too heavily on the rates they will be paid for services, while neglecting the finer details of contract terms and language that govern the relationship with the payer.
This is where providers risk missing the forest for the trees. While reimbursement rates are crucial, the terms surrounding claims processing, billing, and authorization are equally important. Contractual language can significantly impact the way claims are reimbursed or denied down the line.
One critical area to address is the definition of medical necessity. This term is central to whether a service is covered under the insurance plan, and how the insurer evaluates the appropriateness of services provided. Without clear and mutually agreed-upon definitions in the contract, insurers may deny claims based on interpretations that were not discussed or agreed to in advance. The same goes for other key definitions, such as the sites of care or the specific codes to be used for services.
While many of these terms may appear standard or “boilerplate,” they can have significant consequences if not properly customized to the provider’s specific services. Behavioral health providers should take the time to ensure that definitions, processes, and coding requirements are clearly outlined and tailored to their services and specialties.
Guard Against Future Policy Changes
Another often-overlooked aspect of contract negotiations with commercial payers is the potential for future policy changes. Insurance companies frequently modify policies or introduce new documents that can substantially alter a provider’s relationship with them. Buck advises behavioral health providers to anticipate this possibility and include contract terms that give them the ability to object to any material changes to the agreement.
For example, a payer might introduce new policy amendments that affect coverage or reimbursement rates for certain treatments or services. If a provider has already signed a contract, they may be forced to accept these changes without much recourse. However, by negotiating contract terms that allow the provider to contest or even opt-out of certain policy changes, they can better protect themselves from unforeseen disruptions that could impact their revenue and services.
Ensuring the right to negotiate or object to changes in the contract may provide leverage in the future. Providers should be proactive in securing the ability to renegotiate or terminate the contract if material changes are introduced that affect the terms of coverage, payment rates, or any other critical elements of the relationship.
Negotiating Flexibility in Authorization and Claims Processing
Behavioral health providers should also focus on negotiating specific language related to authorization and claims processing. Authorization issues are common points of friction between providers and payers, and disputes over whether services are authorized can delay reimbursement and create operational headaches.
To avoid these issues, Buck recommends that providers negotiate clear terms for obtaining prior authorization and address potential roadblocks upfront in the contract. For example, some commercial payers may require prior authorization for certain services, but the process for obtaining it may be cumbersome, leading to delays in service delivery and payments. By clearly defining the requirements and timelines for authorization in the contract, providers can avoid future disputes and prevent delays that impact their cash flow.
Moreover, Buck suggests that behavioral health providers include language related to the handling of claims denials. These terms should outline a process for appealing denials and provide clear guidelines for resolving disputes efficiently. This will help providers avoid prolonged disputes over claims and ensure that payment issues are addressed swiftly.
Conclusion
For behavioral health providers, entering into agreements with commercial payers can be a rewarding but complex process. By understanding their motivations, carefully negotiating the language of their contracts, and anticipating potential pitfalls, providers can set themselves up for success. The key is not to focus solely on reimbursement rates, but to ensure that contract terms are tailored to their specific needs and services.
With the right strategies in place, behavioral health providers can build positive, long-term relationships with commercial insurers, ensuring that patients have access to the care they need while protecting the financial stability of their practices. Through careful negotiation and proactive contract management, providers can navigate the challenges of commercial insurance and foster a more sustainable future for their organizations and the patients they serve.
