The questionHow can a medical practice negotiate higher reimbursement rates with insurance companies?
Short answerA medical practice can negotiate higher reimbursement rates with insurance companies, but insurers tend to respond to proof rather than requests. To estimate what it's worth, compare rates on your top 20 to 30 codes with a market reference for each major insurer, multiply each gap by a year of volume and divide by annual revenue. Because a better rate applies to every visit, the gain repeats each year.
Somewhere in your files is an insurance contract that hasn't been touched in years. It renews on its own. Nobody's looked at the rates since they were signed.
And every single visit with that payer still pays what it paid back then.
Illustrative data, not actual figures.
Ask yourselfWhen did you last compare your contracted rates with the market, not just with last year's contract?
Why this matters to you
Most practices can tell you how much revenue comes from each payer. Few can tell you how their rates on their top codes compare with the market. Without that, there's nothing specific to ask for, so contracts renew on autopilot.
Here's what makes a better rate different from almost every other improvement. Once it's in place, it pays on every visit with that payer, and it keeps paying every year the contract runs. You don't hire anyone. You don't change your schedule. Your physicians don't change how they practice.
The work all happens up front, in getting the rate. After that, it just shows up in every check.
The honest part: it isn't quick
If you've ever asked a payer for a raise, you know how it goes. Slow replies. Requests for more information. A counteroffer that barely moves. It's easy to decide payers just won't renegotiate.
They do. But they don't respond to asking. They respond to proof. That means knowing exactly where your rates fall short on the codes that matter, showing how your patients' outcomes compare with the market, and sticking with it through months of back and forth.
That's real work, and it's why most practices never finish it. They have patients to see.
Is it worth the effort? Find your number first
Before anyone picks up the phone, you can estimate what's at stake using contract and volume data you already have.
- Start with your top payers. Usually three to five make up most of your revenue.
- List your top codes for each. Often 20 to 30 billing codes cover most of your volume.
- Find the gap. For each code, compare your contracted rate with a market reference, such as a percentage of Medicare or the price transparency data insurers now publish.
- Multiply by volume. The gap times 12 months of volume is what that code is worth each year. Add them up.
- Divide by annual revenue. That share is what renegotiating could be worth.
One prospect's estimate, not a guaranteed result. Your number depends on your payers, codes and volume.
What actually wins a payer contract negotiation
A number tells you what to ask for. Proof is what gets you a yes.
Outcomes data lets you show payers how your patients do compared with the market. Fewer complications, fewer costly admissions, better results for the same population. That's a conversation about value, not a request for a favor. And some payers are moving toward contracts that reward practices that can measure and document results.
We've seen it work. In one maternal-fetal medicine practice, Practice Now benchmarked the practice's outcomes against statewide hospital data, showed payers where it compared favorably, and negotiated stronger contracts, including shared-savings arrangements with Medicaid plans.
How Practice Now helps
Renegotiating takes time, data and persistence. That's exactly the part we take off your plate.
- We find your number. We compare your rates on your top codes with the market for each major payer, so you know exactly where you're underpaid and what it's worth.
- We build the case. We benchmark your outcomes and put together the proof payers respond to.
- We do the negotiating, from the reimbursement rates on your top codes to the contract terms around them. We handle the back and forth, for as long as it takes, starting with the contract that moves the most money.
You keep seeing patients. We go get you paid what your care is worth.
See what this looks like in your numbers.
Start with a free first look at your numbers in a discovery call.
Terms used here are defined in the Practice Performance Glossary.