Practice Matters: Payer Contract Negotiations 2.0: How to Hold More Aces

Independent healthcare groups are facing increasing pressure from reimbursement challenges, rising labor costs, and growing payer complexity. In this episode of Practice Matters: Executive Insights for Independent Healthcare Groups, Christina Sanders, Director of Healthcare at DMJPS CPAs + Advisors, sits down with Doral Jacobsen, Founder of Prosper Beyond, for a candid conversation on payer contract negotiations and the strategies healthcare leaders can use to strengthen their position.

Drawing on more than 25 years of experience, Doral shares insights on how practices can approach negotiations more strategically, better understand their leverage with payers, and make decisions that support long-term financial stability.

DMJPS is a CPA and advisory firm serving healthcare organizations across North Carolina, providing accounting, tax, consulting, and strategic advisory services to physician groups, dental practices, and other healthcare providers. 

Through the Practice Matters podcast, we bring practical conversations and expert perspectives to independent healthcare leaders navigating today's evolving healthcare environment.

Whether you're evaluating existing payer relationships or looking for new ways to improve financial performance, this episode offers valuable perspectives for healthcare executives and practice administrators alike.

Presenter: Doral Jacobsen, MBA, FACMPE - Prosper Beyond
Facilitator: Christina Sanders, CPA - DMJPS Healthcare Director

Transcript

SPEAKER_00 0:00

Hello, and welcome to Practice Matters, Executive Insights for Independent Healthcare Groups. My name is Karen Rodriguez, Chief Marketing Officer at DMJPS CPAs and Advisors. I'm glad you're joining us for today's conversation. At DMJPS, we work alongside independent physician groups, dental practices, and healthcare organizations across North Carolina, helping leaders strengthen financial performance, improve operations, navigate complex challenges, and position their organizations for long-term success. Through this podcast series, we're bringing practical insights and real-world perspectives directly to healthcare executives and practice leaders. Today's episode features a conversation with Doral Jacobson, founder of Prosper Beyond, a nationally recognized healthcare consultant with more than 25 years of experience helping organizations strengthen payer contracting strategies and improve reimbursement outcomes. Facilitating today's discussion is Christina Sanders, Director of Healthcare at DMJPS. Christina works closely with healthcare organizations of all sizes, helping leadership teams gain financial clarity, improve operational effectiveness, and make strategic decisions that support growth and stability. In this episode, Doral shares actionable insights on payer contract negotiations, including how healthcare organizations can better understand their leverage, approach negotiations with confidence, and create strategies that support long-term financial sustainability. At DMJPS, our goal is to provide healthcare leaders with practical executive-level guidance that can be applied immediately when helping organizations navigate an increasingly complex healthcare landscape. Thanks for listening and let's get started.

SPEAKER_01 1:57

My name is Christina Sanders. I serve as our healthcare director here at DMJPS CPAs and Advisors. Now it's my pleasure to introduce our special guests. Doral Jacobson is founder of Prosper Beyond, a boutique payer contracting firm. She's also a seasoned healthcare consultant with over 25 years experience, known for assisting organizations with next generation payer contract negotiation. At DMJPS, we believe strongly in surrounding our clients with the right expertise. And relationships like this allow us to deliver even greater value to the practices we serve. Without further ado, I'll turn things over to our presenter to get things started. It's all yours. Thank you so much.

SPEAKER_02 2:42

Thank you so much for having me today. I'm excited to be providing this information, payer contracting negotiation 2.0, how to hold more aces. A little bit about the discussion that we're about to have. This is 2.0. So it assumes you've done a little bit of homework in terms of identifying what it is that you're interested in negotiating. It's really the space between knowing what you want to do and doing it. A lot of the things that we're going to talk about have to do with addressing gaps that you may have in skill set. Also, we're going to address mindset because that's a big thing when it comes to contracting and making sure that you understand what it is you can control and what you can't. So this is a deep dive into the layer below negotiations proper, if you will. A little bit about me. Thank you for the introduction. I am from the payer side, actually, the consulting side. I've run practices. I'm currently on the board of the Carolinas MGMA, which is over North Carolina and South Carolina, and I serve as the chair of the contracting committee. All right, from a learning objectives perspective, we're going to talk a little bit about targeted questions. These are really important because a lot of times folks just don't know the right verbiage from a contracting perspective and what's going to land with the payer. So I'm going to give you some questions that you might be able to use. We're going to talk about methods that we use in communication that everyday consultants across the practice use. A little bit about Prosper Beyond. We serve clients across the country in independent practices primarily and all pairs. So we are accustomed to communicating face-to-face, email, and of course, mostly through mediums like this, Zoom meetings. So I'll give you some good intel there. Then we're going to talk a little bit about forming a strategy and some of the tools that we use to back up and make sure that we are working on things that are going to be very impactful from a practice perspective. So from an agenda perspective, we're going to talk a little bit about landscape. And this is really just to set the stage so you understand what it is that we're dealing with and the things that we see from a landscape perspective. I'm then going to move to overarching strategies. These are things that we don't routinely talk about. They're kind of in the background, but I'll share with you some of the successful strategies that we use every day. And then I'm going to talk about communication ACE moves. This is really fun because I'll share some of our secret sauce, some things that we use when communicating with payers in hopes that you take them back and use them too. And I'll stop right here and say, you know, we only work on payer contracts. That's all this company does, and we work on it across the country. The saddest thing I ever hear from payers is that we're not going to pay this practice more because everybody has horrible rates. So I share this with you because if you walk away from this webinar and start the contracting process, you are helping all of this, all of us. Then I'm going to talk a little bit about case studies. I want you to understand that big practices and small practices can win in negotiations, and we see it happen every day. And then we've got a couple of activities. These are really intended more for a live audience, but we will do them with you so that you can play along and I think you'll find them interesting. All right, let's talk a little bit about landscape. Um, this uh it doesn't feel like this. This is what we commonly hear uh in the rooms when we're talking about payer contracting. It is just horrible. I've had uh clients say, you know, I would rather eat a bucket of bees than do what you guys do for a living. And uh that's why we're a niche practice, right? We only do this and we become accustomed to all of the things that happen in negotiations, but it is really difficult. The payers don't make it easy for practices, it's difficult to find the right people to talk to. There's a lot of ghosting that goes on. Um, if I could see you, I'd ask you to raise your hand and tell me how many of you have negotiated contracts and gotten raises, and hands will go up because I tell you a lot of practices that are our clients aren't even aware they can negotiate contracts. So we'll talk a little bit about why it's important to do that and really you know what you mean to the payers. Um, and the odds are stacked against us, right? We've got these giant payers and we feel really, really small on the practice side. So I'm gonna back up and give you some information about how important you really are to a payer. Uh and also I'm gonna share with you that you know, we do this, our company has been around for over 10 years now, and we have difficulty getting reps uh to figure out who's the right person, getting ghosted, all of those things. There are ways that you can navigate this effectively, and I'm gonna share some tips and tricks with you. A little example, I have a small group of specialists, it's five. They have been my client in this firm for you know the entire time that we have been open and even before that, and they routinely get increases. Here's the truth the payers have a line item in their budget for increases, and most of the time you're just not in that line item. So I want you to think about it this way the goal is to get you in their budget. Once you're in their budget and they know you're gonna come back, you're in there. So I want you to think about it like that. And a lot of times, if you're not in the budget, you don't think you can get there, but we see it happen. And getting incremental increases is a lot easier. Going back to a payer after 10 years of not negotiating and trying to make up for that time, it's untenable. You're not gonna be able to get all those incremental increases you deserve. But if you go back every couple years, it is a lot easier. I'll also say a lot of this process it can tend to be not logical and it's not linear, and sometimes it is really feels like it's unfair. So, step one in contract negotiations is you have to be sold on yourself. So I'm gonna talk a little bit more about that now. What do pay yourself? They sell a network. So in fact, they sell you. And without you, they don't have a network that they can bring to employer groups. So it's really important to understand that network adequacy is essential. If a payer does not have network adequacy, the Department of Insurance will not allow them to sell in a market. So, you know, you might have more power than you think. Uh, how it works on the payer side is that we have a grid of age, sex, all kinds of information about members, and then we match it up with the network. We need this many OBGYNs, we need this many cardiologists, we need this many primary care physicians. And if I don't have enough to serve the members, I have problems. So I share this with you because it's a big, big deal. Um, also, if payers don't have adequacy, they could lose market share. You know, right here in the Carolinas, we we've had a lot of exits on the marketplace. We've got Ambetter, we've got Oscar, we've got the blues. So if there isn't adequacy from a network perspective, uh, plans might not be able to sell into the market. And when there's consolidation, that can be a really big deal. Also, it uh can be a cost increase. So if you are an independent practice, here is what we know independent practices always bend the cost curve because they're not beholden to a system. So the more independent practices there are, the better it is from a cost, and generally speaking, a quality perspective as well. So you're very, very valuable. Also, it's the it's the perfect storm. We have a shortfall of physicians. This unfortunately is not getting better from a projection perspective. And we have 10,000 people a day turning 65. Now we know 65 and older, those are the ones that are consuming the most health care. So it is less physicians, more people consuming health care. So what this means to me is that practices are really important. And I think that we feel very disempowered. And I just want you to know that the truth is you have more power than you think. Um, and again, payers budget, budget for increases, and it's based on the practices that come to them and say, we want to raise and we want to make sure that you think about it this way. I should be part of that budget. My expenses are increasing, you're collecting premiums, those should be shared with the people who are actually doing the work. And most healthcare organizations simply don't prioritize contracting. It's kind of like the silent killer. It's not the burning issue of losing a clinician or being down on the front desk, you know, it's not this big fire. Yet, if you're prioritizing it and it's part of your board packet and it's part of your financial strategic plan, it what gets measured, uh, what gets uh monitored is measured and it will become something that will be very important to your practice. So make sure that it's on the radar and you're talking about it on a routine basis. We find that's very helpful. Uh also, if you don't ask for increases, you're not gonna get them. Mostly what we see on the payer side is that they'll send out these love letters where you're getting a rate, uh, a different rate, and usually it's not great news. So if you do not negotiate, your rates are either staying the same, or in some cases, they could be getting worse. So, proactivity is really, really important. You have to ask. Um, also, mindset. This is really important to understand is that negotiations require a ton of tenacity and also a shift in mindset. And I'll I'll talk about that more here because it's uh it's really fundamental to understand, you know, there's work that you need to do from a mindset perspective that's going to help you be successful in negotiations. All right, I think this is a pretty interesting slide here. When you think about the number one employer in our country currently, it is healthcare. And back in the 90s, it was not, it was manufacturing. And I share this because this is everything, right? It's hospitals, it's healthcare systems, it's pharmacy, it's everything. And we've monetized healthcare in this country, and it's really not going great because we have shorter lifespans than comparable countries, and we've got the most expensive care, about $4,000 per capita, a matter of fact. But I share this slide because a lot of practices you may find yourself in this camp can feel overwhelmed because there's so much, it's so complex. Um, so many vendors, so many considerations, and it's because it is really what's going on in our environment. So if you feel overwhelmed, you're not alone, and it uh it would make sense that you do. A little bit now turning to overarching strategies. Uh, and this is you know, feeling defeated before you start. We have a lot of folks that share that this is their sentiment, and I'm gonna walk through ways that you can combat this. Fear of rejection is number one. This can be super paralyzing because it you it can be reflected as like a personal failure. Many uh many folks in practices do not possess negotiation skills, they don't have that training. And what we see is that there can be a 63% decrease in net income when you don't retain folks to help you from a negotiation perspective or acquire those skills internally. And uh of course, it can be really paralyzing from a fear perspective. So the antidote to this is to zoom out and depersonalize, and I'll talk more about that in a second. The next thing that feeds into feeling defeated is lack of confidence. A lot of times the lack of confidence is because we're just not prepared to advocate effectively. You know, we've we've just we're dead before we start, and we really don't know how to talk to payers. And 80% of negotiators do not have a fallback plan. So the antidote to this is to obtain skill sets and prepare. We call it do your homework. So I'm gonna talk a little bit about that in a second here. The third is no track record. This does really feed into confidence as well. So many practices who are not routinely prioritizing pay or contracting and don't have, they just don't have the experience to reference. So success breeds success, right? When something goes well, it's right on the radar for next year. But if you don't have any of that experience, that's going to be a little more challenging and might not fall onto the strategic plan. So the antidote is to start now, and and I say that with all seriousness, just pick a pair and start down the path. I'm going to give you some great tools and even some emails to start with. But what we find is that practices that start win. Then aversion to conflict. I don't know if there's anyone in the room that is conflict diverse, but many, many people are, and it can be really confrontational and triggering. These things are absolutely true, and it can provoke anxiety. So I'm going to talk a little bit about a shift in mindset and some studies that we, you know, we lean upon to help you deal with uh being conflict diverse, which is something that's very common as well. All right, so going back to fear of rejection and zooming out. So, what I want you to think about is the circle of control here. The circle of the middle circle, these are all of the things that you as a practice leader can control. You can control your street strategy, you can control your goals, you can control if this is on the radar at all. You have some control over payer contracts, what you're contracted with, what you're not, the tools that you use, the staff that you retain, etc. So you have a lot of things that you can control, and uh this is something that I want you to think about because we really do have more control than we think. Moving out, we've got the circle of influence. Now, these are things like payer relationships. You might not even know who your rep is for Cygna. So how can you have a relationship? But you you could start down that path. You have some influence, but you might not have total control. Market position. Now you have some control over market position, but you can't control the competitive environment environment in total. So you do have some control. HETIUS ratings, you do not have control over the payers' HETIS ratings, but you certainly can contribute or detract from them. So it's circle of influence territory. And then moving out even further, our circle of concern. These are things like regulatory issues. Um, for example, OBGYN. We are uh codings completely changing in 2027. No more global codes. What's gonna happen? Nobody knows. We shall see. We can't, there's nothing we can do from a uh we can't influence that it's already done, but we need to be aware um all kinds of regulatory burdens we don't have a lot of control over, but we do need to be aware. Here's what I want you to think about from a circle of concern perspective. You can advocate. Uh the MGMA environment in it is very, very good at advocating. And we have from a Washington uh, we're on the hill. We are advocating for reducing burden at the state level. We are advocating, we have White Coast Wednesdays. There's lots of things that we're doing to make sure that we are advocating for practices. So I want you to think about you might not have a lot of concern uh areas that you can work on from a regulatory perspective, but you can have a voice, and I definitely uh recommend that you use that from an MGMA perspective. It can be super duper impactful. So we're gonna be focusing on circle of control and circle of influence. All right, so wanted to talk a little bit about preparing and prioritizing. So from a this is an importance and urgency grid. I'm sure you guys have seen these before. We like to think about it as what is a high high? So, for example, the high highs are the payers that are going to be really, really important to you, the ones that have like the most volume, for example, Blue Cross Blue Shield across the country is a good example of this. This is something that you're going to assign responsibility for. So someone's going to be responsible for working on that contract. Um, and you're going to prioritize it maybe for the first quarter of the year. And then moving on to your high importance, low urgency, these might be things that you want to push out a little from a priority perspective. However, you want to assess capacity for that and et cetera. So I also want to talk a little bit about the low, low. Sometimes there are contracts that might not be super duper important to you, but they're horrible. You might want to ditch those, and I'll talk a little bit more about transparency data in a minute, but payers can now see what you are being paid by other payers. So it's important that you are mindful of that because you will hear that in negotiations now. We hear it all the time. So if you have a contract that's not so great, it might be something that you won't want to continue participating in. It's really important to have a strategy because it's going to help you keep a rhythm and it's going to help you let the data tell the story so you understand why it is you're focusing on what you're focusing on. And it illuminates key issues, right? So if you're looking to reduce administrative burden, you might even fold this into your importance and urgency grid. All right, a little bit about lack of confidence. Start now. There's this thing called Kidlin's Law, which I'm a big fan of, and what it says is if you write the problem down clearly and specifically, you've solved half of it. Kind of harkens back to the slide we just looked at. But really, this helps us with a clear understanding. It helps us to focus and identify solutions. You can break it down. It's going to make things more doable when you write things down, especially when you're contracting. And it's going to help you determine, you know, step A who is it that we reach out to? And who are we contracted with? What are our rates? Do we have our executed agreements, etc.? It's also going to help you reduce and Ambiguity. You know, most of the clients that we have when we first start working with them, 100% of them do not even have their executed agreements. It's very, very common. Payers don't always send these to you. But don't let that scare you. You can get them. Get them. It's going to reduce the ambiguity. Get your full fee schedule. You can ask the payer for that information, and it's really important you do when you start so that you understand exactly what you're working with. And so you don't hurt yourself in a negotiation. This just leads to better outcomes. Back to the reducing ambiguity. You know, a lot of times we will have clients tell us, you know, we have the best such and such rate, but with the transparency data, you can look at what the rates are for your competitors. And once you understand that, it's going to help you set the strategy that's going to produce the best outcomes for you. So write things down, it's really going to help you. All right, I'm going to talk a little bit about mindset here. This is something that is really important because this can be really uh anxiety-ridden, right? Negotiating contracts and talking to these payers and all of the things that happen make it very difficult. But I want you to think about how to reframe anxiety as excitement. There was a Harvard study, and they actually studied karaoke, math, and public speaking, and found that when folks reframe anxiety as excitement, it really improves outcomes dramatically. So I want you to think about that from a mindset perspective and just bookmark that for when you start down this path. Focus on the opportunities, shift your focus. So instead of thinking about it as this is such a threat, um, imagine the successes that you're gonna have. I was just on a call right before this um webinar where I was talking to a client that's like, do you ever see when you open up negotiations that rates go down? Uh, you know, that's not something that we see. So all the fears that we have, the catastrophizing we do, we don't commonly see that. Again, back to slide seven payers sell you. They want to keep you at this horrible fee schedule that you're at right now. But if you ask for more, we, you know, usually we see great results. Um, and there's a good ROI. So I just want you to know that we see that all the time. Normalize no. In payer contracting school, when I was on the payer side, they taught us to say no in seven languages. It's part of what we're taught. And what I want you to think about is the person that you're speaking with or emailing, when they say no, what it means is they cannot help you, but there's someone else on the payer side that can assist you. So you just need to escalate. Uh, also visualizing success. This is really, really important. So, again, back to the strategy, make sure that you know exactly what success looks like to you and paint that picture. So when you're working on negotiating the contracts, maybe you're folding in administrative burden, maybe you want to get rid of prior authorizations, maybe you don't want to be in the Medicare Advantage plan anymore. Be very specific. Also, anger, channel anger. We see um that it can be very helpful to have a little bit of anger under you, and I'm gonna talk a little bit more about that in a second here because it can be um actually uh a very pivotal thing. All right, so transparency data. I I don't know how many of you all have checked this out, but it is available. Now it's in uh a horrible format, something called an MFR, which no human could ever download. So, of course, we have a whole army of middlemen selling transparency data out there, but that's the only way that you can really get it. This is actually blinded information from one of our clients, and that was their practice and the competitors. So you can see how irritating 99213, they're getting 53 bucks, and there's someone right down the street getting 104. So anger is something that you're gonna feel when you see some of this data. And I I I think about um you know, stories that I've heard about how that can be fuel. And Barbara Cochrane from Shark Tank actually tells the story. She says sometimes when the door won't open, you just knock a little louder. And so you can definitely use anger as a superpower. There was a study that Texas AM did where um anger was uh linked to achieving goals, and we'll do a little exercise in a second here. What it does is it increases your effort, focus, and persistence. So, what it signals is what we can do about a situation, it really pushes us to act. So when you're looking at transparency data and you're getting a little grumpy about it, which I don't blame you in some cases, just know that it you can just really use it as fuel. Phrase named for rearranging letters to form another. Um, this is part of the study that I was just telling you about. Uh, so we are going to look at this and take a little test here to see how anger impacts outcomes. So a little true and false coming up. Number one, improved goal attainment. When solving anagrams, participants in the anger condition solve 39% more anagrams than those in the neutral condition. True or false? True. This is true. Persistence. When solving difficult anagrams, participants in the anger condition were less likely to give up, spending 20% longer solving difficult anagrams than those in the neutral condition. True or false? This is true as well. It can be uh definitely create more persistence. And the last one solving easy anagrams. Uh, participants in the anger condition performed 15% better. This is false. So we have more stick toativeness when it's actually harder. So when we are we are mad. So isn't this interesting? I find it fascinating, and it's definitely something that we use at Prosper Beyond in negotiations all of the time. So just to summarize here, anger increases efforts towards attaining a desired goal, and the relationship between anger and success can be it can lead to better outcomes. All right, so I'm gonna talk now a little bit about communication, ACE moves. Perspective taking. We're gonna flip the script a little bit here, and I'll talk a little bit about how we think about it when we're talking to payers. Um, nonverbal communication, believe it or not, it's actually 55% of communication. So I'm gonna talk a little bit about some things that we do at Prosper Beyond that help us on the nonverbal side. And then being clear and concise. Again, back to Kidlin's law, particularly with proposals. When you are submitting a proposal to a payer, you want to make sure that you are very, very clear. And then humor. Uh, this is something that we use all the time. As I've said, it's tense, there's a lot of anxiety, this can be triggering, um, and having a sense of humor during it, and I'll give some examples, really can help lighten things up a little bit. Uh so you've done your homework, and now we're gonna get into the data and the framework from a communication perspective. So check this out the percent of negotiations reaching agreement, perspective taking wins. So when we think about perspective taking, this is more about understanding the recipients or your counterparts' viewpoint. And um it is really, really important to do that. It's just it's more of a cooperative approach. And I also want to share with you that um, so the collaborative approach from a negotiation perspective, 60% of the time is successful, an adversarial approach, 9% of the time is successful. So just think about that. When we're more leaning into perspective taking and collaboration, it really helps us from an outcome perspective. Uh, also active listening, you know, uh, try to ask the payer questions and get them to talk about themselves, how long they've been at the payer, a little bit about what's going on there. It kind of breaks the tension up and helps you when we're working, you're working on a negotiation. And then mimicry, this is it really helps your counterpart trust you. So it's like matching the cadence of their speech, um, also asking them questions and um mimicry, strategic mimicry is actually repeating the last three words that someone says. And it what it does is it cues them just to keep talking, which generally speaking, people uh when you ask them questions about themselves, you become more likable. So this is a little bit of the psychology that we use, and I hope this is helpful. All right, nonverbal. I think this is really interesting. Check out your background. Uh, it turns out that plants and bookcases win. So uh pay attention to that when you're uh communicating with the payer. Another thing that we do is we look for cues. I was on a call with a payer in Oregon and they had a geode on their desk, and the consultant that was leading the project was a rock hounder, so they started conversing about that. Um, another time there was a person we were talking to, and they were a new dad, and they had a number one dad mug on their um that they were drinking from. So we chatted about that. Uh, make sure that you're paying attention to those things and those cues because it's going to help you connect with that person at the payer, which is going to lead to them answering your emails and your phone calls, which is what you're really gonna need. Resist multi-cam multitasking. I know this is hard, we're always doing it all the time, but if you can just put your cell phone out of sight and really focus on the person, they're gonna pick up on that energy. And then keeping your camera on, you know, it's amazing. We always have our camera on with payers, and a lot of times they'll start with the camera off, but eventually they turn it on because uh we live in this virtual world and it's really hard and it's more connected when you can actually see the person. So, this is some intel on nonverbal, being clear and concise. So we know that well-calibrated communication wins. So this is making sure that it's brief. Um, I don't know about you guys, but sometimes when you you think it's a great idea to send an email that's five paragraphs long, it can go to the end of the email box or yeah, at the bottom of the stack. So we like to bullet is something that we think about a lot. Graphics are another good idea when you're talking about value proposition elements. Use graphics. They're fun to look at and they're easy to talk about. Um, definitely be specific from a proposal perspective. Make sure that you're giving timelines when you are working on negotiations. For example, if you present a proposal, ask them how long it will take you to reply and set a reminder so that you're following up in that time frame. Um, and some just advice from James Clear. He wrote Atomic Habits, which is something that we were reading recently. Uh, and this is kind of cool, but there are some cues that you can set yourself up with location cues. I'm going to do this at this time in this place, will help you make sure that you're following up at a cadence that's going to be helpful because there's a lot of follow-up that if we don't do it correctly, it can bite us in the negotiation process. All right, this could be my favorite slide. Humor and negotiations. I think it's really cool because we get more wins when we are uh when we you know press the funny bone, if you will. So it is um there was a study, humor 602% of the time sellers accepted offers with humor, but it rises to 80 uh without humor, but with humor, 82% of the time we have more success. So the increase is about 20% when we are uh when we're working on negotiations, it just bolters, bolsters successful negotiations and it makes things a little more fun and it can break the tension. It leads to a perceived uh friendliness. So, you know, if you're being a little bit funny, you're a little more likable. And again, we're trying to get people to answer emails here. So I want you to think about that. And then it it, you know, it triggers positive emotion and it helps us from a communication perspective, and it is uh it just it releases oxytocin and our butchering. I mean, it there's so many benefits to lightening up and um having a little fun exchange during negotiation, also competence. I think this is interesting, but it's um the best negotiators make their counterpart feel great about the outcome, even if it's not in their best interest. I had um a negotiation I did actually in North Carolina where a group wanted a special carve out and the payer just couldn't figure out how to do it. But um, what we do is we are working on having that person that we're talking to on the payer side become our advocate. And this person actually got us um the rates that we wanted from a carve out perspective and worked really hard to do it because of our relationship, um, not just us, but the but the client as well. So humor really helps, and I want you to think about that. All right, verbiage and targeted questions. I am not really gonna talk much about this, but this is these are some of the things that we use. I mean, sometimes when we get ghosted, we'll put in the subject line, which is really important. Eight requests for response, for example, denied. We've served this many of your patients. So bear be very specific again. Um, low ball offer. Um, we might have to terminate the agreement. So use these things. These are some gifts uh for you to try. All right, we're gonna play a little matching game here, and I'm just gonna say them as we go. So 60 companies lacking formal negotiation processes show a 63% decrease in net income. Uh, 59% of successful negotiators use a cooperative approach. 40% of people face barriers to negotiations due to lack of skills and confidence. So 40%, that's pretty big. 17% of medical practices admit they never review their contracts. I think it's probably even higher. And then 21% of negotiators think the relationship has been strengthened when they complete the negotiation. We definitely see this, that it definitely assists folks from a relationship perspective. All right. So a little bit on case studies here. Um, this is just to hopefully get you excited about this. This is a uh this is a 16 physician practice. They were in a PHO, didn't have a lot of transparency. These folks were really irritated that they had no idea how these funds were being distributed, and they said we want to go direct. So we assisted them to go direct with their contracts. Um, it was really cool. We had a meeting with a major payer, and one of the physicians asked them, you know, what's different about being at the practice compared to being at the hospital system. And he basically said, I get to practice medicine the way that I always imagined I would. That was not the case when I worked at the system. So again, um independent practices are the bomb. Uh uh so it took about 10 months to flip all these contracts, but wow, what a giant win for this group. Pretty small practice, about a half million dollars pickup on the fee for service side and 1.2 on the value-based side. And they now have direct relationships, so they don't have to go through any intermediary, and they've got clarity, and it was just a wonderful win. Smaller practice, a little specialist, um, got a love letter from a payer. That's how we got involved with them, and the payer wanted to give them a 30% haircut in their fee for service rates, which they were not happy about. So we were able to get them out of that. Um, and we were able to get them in the backdoor through a clinically integrated network. So that was kind of cool too. Um, and then they had some workers' comp contracts that had some very disadvantageous language. So we worked on that, and that helped them as well. Uh, you know, from an economic perspective, about $100,000. We reduced some losses and we improved, helped them improve relationship with a clinically integrated network. So a lot of times folks are like, do small practices win? And we see that happen all the time. Uh, and then we have an example of a specialist with an ambulatory surgery center. They're in a market with a lot of consolidation, and um, so they're just in the middle of three or four giants, actually, and they don't think they have a lot of leverage, but they actually really do. I want you to think about this too, asking a payer for an increase when you're a million-dollar business versus a you know, billion-dollar business, it's a lot smaller, so sometimes it can even be easier from a payer side. Um, we were able to help them with some carve outs and some escalators. If you have not negotiated in many years, it might take the payer a couple years to get you to where you need to be from a market position. So get escalators in your contract, make it a three-year deal so that you don't have to go back to the table so often. And they had more collaborative relationships with the payers after we finished as well. And then a multi-specialty practice. Um, they have an ASC now as well, a little bit bigger, and they were having a lot of problems on the value-based side. They didn't understand some of these agreements, and we actually ended up, they they declined some of the value-based agreements because the juice was not worth the squeeze. You know, they they definitely had a lot of parameters that were difficult to meet. It was going to require retaining staff, salaries, etc., and the bonuses just weren't there at Prosper Beyond. Sometimes we we call that the mystery money. Uh, so make sure you understand what it will take from an investment perspective to be in a value-based contract. It may or may not be something you want. Um, and overall, from a negotiation yield perspective, the pickup for them was about 5.8 million, and they also were able to get some escalators. So that was a good one as well. And then an FQHC that we worked with. This is really interesting. A lot of FQHC clients we have on the commercial, they're serving commercial members. Um, this one didn't, they were flipping their contracts to FQHC, so we were able to assist them. It was really great because, of course, there are safety net in the community, and they also want to serve the commercial base as well. Sometimes payers think that FQHCs don't care about commercial business. That is not the case. They deserve to be paid fairly as well. So, this is a something that I want you to think about if you're a rural health clinic or an FQHC. A lot of them women negotiate women negotiations as well. You just have to have a strategy, just a reflection, and then we'll do some QA. So get your questions ready. All right. So little family feud here. Name the eight ACE strategies used in pay or contract negotiations. So I'm just gonna go through these for us. The first one is to prepare. Um, I I share this because sometimes when folks go into negotiations, they can lose because they don't have their executive agreement, they're not sure what their current rates are, and you really need to get all of your information so that you are very clear about what you're being paid now, so that when you're asking for increases, you are really understanding what it is that you're asking for. So the homework is really important, and we don't do any negotiating unless we actually have all of those components first. Prioritize. This is really important because a lot of times it falls to the bottom of the radar. And again, make it part of your financial packet that you're looking at on a monthly basis. It's really cool because I have lots of examples of success stories. We actually send our clients an annual report, well, the one pager of all the successes that they have, and it blows them away. You can win on language, you can win on negotiations from a revenue perspective, and also administrative burden. So success breeds success. So when you prioritize and also communicate about it, it's gonna help you. Work on your mindset. I know this is tough. It's like the last thing anybody wants to do is deal with these payers. I get it. However, uh, we see people win every day, and it's really exciting. So think about it from a mindset perspective and think about all of the wins that your competitors are probably involved with, and you should get a piece of that pie too. Be get clear and be clear. So, again, back to making sure that you have all of the components for a framework, and then be clear when you're negotiating. It's not sufficient to just say we want an increase in rates. You've got to tell them exactly the kind of increase that you want, and potentially even where you want it. So get clear and be clear. Perspective taking. Make sure that you're really thinking about, you know, how is this what's going on from a uh in the payer's mind when we're having this discussion and talk about the elephant in the room, you know? It's really important to uh think about what it's like on that side. You know, sometimes you'll hear things like we say we call it at Prosper Beyond the Crack in the Door, you know, someone will deny and then um get them. On the phone and ask them open-ended questions like, what would it look like if we terminated our agreement? Would you have network adequacy? And so I think about how you can force the payer into thinking about those things and do a little perspective taking. It'll help you. Nonverbal focus, you know, check the things out on the desk. You know, make sure that your um, you know, your uh your background is something that's going to help you from a trustworthy perspective. And use humor. This is a really fun one to do, and I encourage you to do it. It helps you look more competent and it actually makes things a lot more fun. And then channeling anger, I think this is something that is really useful, especially we have lots of clinicians, lots of practices that are really upset about it, and we just we channel it. So it can be a real helpful thing.

SPEAKER_01 44:55

I think in terms of negotiation with employees, maybe with friends, with spouses, these are really great tips for any type of negotiation or difficult conversation.

SPEAKER_02 45:10

Thank you. Yep, I use them with my kids.

SPEAKER_01 45:13

Yep. Even though humor sometimes may not quite be appropriate, depending on what you're negotiating. Depend.

SPEAKER_02 45:21

So just a little summary. I've got some resources listed here, um, some web websites, uh, a few great books at Prosper Beyond. We are always reading these things and sharing things with each other. So take a look at this. I hope this is helpful. Uh, I think one of the number one resources is the MGMA. We have a very strong state MGMA. They're always advocating. If you uh are interested, you know, let me know. I can put you in touch with the folks over there, but it can be very, very useful. And uh you don't rise to the level of your goals, you fall to the level of your system's atomic habits. I think that's uh really pertinent to contracting. And I leave you with that. And now we will turn it over for questions.

SPEAKER_01 46:11

Thanks, Dora. We have a few questions for you. Um, so you mentioned prioritize and prepare, but with limited bandwidth, can you elaborate on which contracts my practice should tackle first and what really is a realistic negotiation?

SPEAKER_02 46:32

Yeah, so uh with limited bandwidth, I mean, there's really five pairs that are across the country the ones that are we're always working on. That's Anthem, Blue Cross, Blue Shield, Aetna, Signa, United Healthcare, um, and to some degree, you know, Humana, Medcost, et cetera. But I think the like the big four, those are the big four or five. And the ones that are driving the most business to your practice, of course. So I think that it's um, you know, you can be doing focusing on those. Uh and yeah, and it's it from a bandwidth perspective, this is the tricky part. I think uh planning, you know, homework, like I like to think about it from a quarter perspective, like maybe last quarter gather your executed agreements and your rates, and then first quarter launch a couple of negotiations. Um regarding success factor, uh, you know, it's amazing to me, but our uh we calculate our ROI continuously, and right now it's 846%. I don't know where you can get a better ROI than that. Last year it was 1500%. So, what that means is that the practices that ask for increases succeed almost all the time. So we see a lot of successes. I think you need to think about it this way: you need to ask for much more than what you think you're gonna get. Do your homework on the transparency side as well. It's going to help you understand where your peers are, and then also adjust for example, if you were acquired, if you're independent, if you were acquired by a system, how much more the payer would have to pay for your very same services. So all that homework is going to help you answer those questions.

SPEAKER_01 48:23

Great. And let's say we negotiate or we renegotiate, um, but it hasn't, we haven't done it in a while, or we didn't really get the increase that we wanted. How soon can we renegotiate or when can we go back to the table?

SPEAKER_02 48:40

It depends on the payer. Sometimes you you have to look at the term of your contract. So if you're in it for multiple years, you can't go back until your term is up. Um, but we've gone back six months later for various reasons. And it's a relationship, right? So if something's happened and now this doesn't work, you know, you've merged with another group or CPT codes have changed, talk to the payer and find out if there's something that can be done. Um, and because really them helping you be sustainable helps them. So I I I think I think everything's negotiable. So even if it hasn't been that long, have a discussion and see if they'd be willing to open it up. You never know. Good question.

SPEAKER_01 49:25

Shifting gears just a little bit, you talked a little bit about rate comparison and and the data not necessarily being readily available or very user-friendly. So, what is the best way to run a rate comparison if we don't have the data or access data?

SPEAKER_02 49:43

Yeah, there's so there's either you can, I mean, you can literally Google and say who are the transparency vendors, there'll be many, many, many of them. And that's really the way to do it is to go through a vendor because these MFRs are as big as the Netflix library, and it's um you you can't download them, so you have to go through a third party. But there are third parties that are available. If you choose to have a consulting firm assist you with negotiations, usually, I mean, we all have them. We all have, I mean, we have to have them.

SPEAKER_01 50:16

But what about using Copilot or Chat GPT?

SPEAKER_02 50:20

You could try. You could try. Here's another caveat with the tick data, though, is that it there are no teeth in the legislation. So payers can push out data that's incorrect, and there's no penalty for doing that. Our vendor actually rates it. They'll be like, this file this month is Swiss G's, and we it, but there's no penalty if they push out information that is not complete or accurate for that matter, unfortunately.

SPEAKER_01 50:49

Excellent. One more question before we wrap things up. At what point do you really recommend using termination language or actually terminating?

SPEAKER_02 51:00

We terminate contracts every day, actually. There are some payers that the negotiation will not start unless you terminate. And that's just culture on their side. So termination is something that we do all of the time. Um, I think the way you need to think about it is do you want to work for this paycheck? And is this relationship worth it? And what would happen if you terminated? And many times we've terminated most of the time when we terminate, their termination never happens because the payer comes right back. Um, but sometimes the termination is due to administrative burden, and the the group just does not want the administrative burden. So they want to replace those members with members with a less burdensome payer partner. So I just think you need to don't threaten it if you're gonna terminate, uh, terminate the contract. But in answer to your question, we terminate contracts all the time.

SPEAKER_00 51:57

Thank you for joining us for this episode of Practice Matters Executive Insights for Independent Healthcare Groups. We hope today's conversation provided valuable insights and practical ideas you can apply within your organization. To access supporting materials, learn more about our healthcare consulting services, or to explore additional episodes in this series, visit dmjps.com. If you have any questions about today's discussion or would like to connect with a member of our healthcare team, please email connect at dmjps.com. We'll be happy to continue the conversation and discuss the challenges and opportunities facing your organization. On behalf of everyone at DMJPS, thank you for listening. We look forward to having you for our next episode of Practice Matters.