The Dos and Don’ts of Working With Insurance Companies

In 2016, Forbes reported that doctors spend more than 66% of their time on paperwork. And a good deal of that paper-pushing is insurance-related. There’s no denying that working with insurance companies is a challenging—yet required—part of running a rehab therapy clinic. One of the biggest hurdles in this professional relationship is negotiating contracts. Most medical professionals have at least heard a story of a nightmare negotiation that led to nothing but frustration. Ultimately, insurance companies usually hold the upper hand in negotiations. It’s a competitive process, but strong negotiation tactics can help providers get great results—and that ultimately helps them better serve patients. Even though losing a provider doesn’t “hurt” an insurance company as much as losing an insurance company can hurt a provider, it’s not a complete David-versus-Goliath situation.

Here’s a breakdown of dos and don’ts for providers preparing to tackle this mystery beast:

When working with insurance companies, do:

• Take the time to understand the codes in payer fee schedules. Insurance companies may intentionally make this challenging by using irregular payment schedules or ones that don’t sync to so-called “standardized” schedules (like Medicare’s). However, clinics that spot these red flags can pinpoint insurance companies that might be shady—including ones whose reimbursements fall well below the averages for certain codes. If an insurance company is intentionally making codes confusing, imagine how difficult it’ll be to work with that payer in the future.
• Find a real, live representative to talk to. It’s much easier to negotiate in person or on the phone rather than via email or online. The phone is the most accessible communication option for most clinics. Find a representative who offers good customer service—and figure out how to reach him or her directly. Remember, insurance company employees are human, and it’s a lot easier to build relationships with real people.
• Do your research. You can’t negotiate if you don’t know the facts—especially those related to how a particular company measures up to others. You can probably do the bulk of your initial research online. Even though insurance companies usually have the upper hand, they’re still businesses—and they’d rather have your money than let a competitor take it.
• Keep track of everything. Even as you build relationships in person and over the phone, you still need to protect yourself and your practice. So, keep a written record of every interaction. It could come in handy in the event of an audit or legal dispute.
• Consider your options each time your contract is up for renewal. When it comes time to enroll or re-enroll, shop around. This can be a long and time-intensive process. Mark your calendar annually so you can start comparison-shopping early. That way, you won’t feel rushed into making a decision (or simply sticking with a certain insurance company because it’s easier).
• Listen to your patients and prospects. If you start getting a lot of inquiries about whether a particular insurance company is in your network, it’s probably worth investigating. You don’t need to appease every single patient, but patients are ultimately your lifeblood. And if contracting with a new insurance company means more patients for your practice, it may be worth taking the leap.

When working with insurance companies, don’t:

Accept no-cause cancellation clauses. Virtually all agreements feature termination provisions, but you should aim to receive a guarantee of at least 30 days’—and preferably 90 days’—notice. Both the provider and the insurance company are bound by such agreements. You don’t want the payer to suddenly drop you without cause, especially when some patients may be coming to you on an ongoing basis. So, a contract that allows for no-cause, sudden cancellations is a red flag.

Forget to look for automatic cost-of-living adjustments. These are relatively rare, but when you can negotiate for them, you’re golden. This is especially important for surgery clinics (or providers who refer to them). Also, try to negotiate for multiple procedure discounts.

Get tempted by a one-rate-for-multiple-products feature. Some insurance companies might advertise a PPO rate—but then you’ll notice the exact same rate is offered for the workers’ compensation insurance (or another unrelated, non-medical item). Clearly, these are two very different fields, and the fee schedule should reflect that. This is a sign of a lazy plan at best, and under-handed tactics at worst.

Miss out on look-back provisions. Every contract needs a provision that lets both parties go back to submitted claims and payments on a retroactive basis. For providers especially, knowing that everyone has between 60 and 90 days (the typical window of time) to do this is a must. Providers should also demand the right to contest amendments. Furthermore, be sure the contract allows providers to issue insurance companies a check for any refunds due—rather than letting the payer automatically deduct the amount from upcoming payments.

Skip over that silent PPO section. If your clinic often treats out-of-network patients, this provision can be a real thorn in your side. It lets insurance companies assign fee schedules—usually without notice—to another insurance group. There’s no room for this in any quality agreement, especially when it’s ultimately the patient who will pay the price (literally). This is an easy one to miss—especially because it could be disguised in a variety of different words and phrases. An easy way to help keep patients financially safe is telling them that the insurance logo on their card is the official contracted insurance company.

The good news, at the moment, is that the Affordable Care Act (ACA) has made both parties a little wary of making major contract changes. That, in turn, has allowed clinics to become more familiar with the workings of insurance companies. However, as the ACA changes, it might encourage insurance companies to make sudden shifts.

Make sure the staff members in charge of insurance negotiations have enough time carved into their schedules to keep track of updates and changes. Working with insurance companies has always been complicated, but prioritizing it can pay dividends for providers and patients alike.

Emily Walters is a freelance content writer. She has written for a variety of industries including healthcare, fitness, lifestyle, and travel. In her free time, Emily enjoys practicing yoga and running along the beaches in San Diego.