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Avea Solutions Blog

Negotiating Reimbursement Rates with Payers: Part 2 of 2

Jul 31, 2019 2:20:21 PM / by The Avea Solutions Team

The Avea Solutions Team


Negotiating Reimbursement Rates with Payers

Addiction Treatment Reimbursement Rates: Part 2

In our prior post on negotiating reimbursement rates, we interviewed PANLR founder and President Kevin Isaacs about how to negotiate more effectively with payers for higher reimbursement rates in 2020. In this article, we continue our interview. 

This is Part 2 of 2 of our interview with Kevin Isaacs from PANLR:


Q: Not everyone has the budget to hire a full-time contractor; how can our readers become more sophisticated?

A: That’s the analysis I referred to in Part 1 of our interview, and it starts with your current agreements and reimbursements, and ends with an honest look in the mirror.

For re-negotiations, it’s tough to know what buttons to push if you don’t know where you stand with each payer. I'd suggest compiling a schedule of your contracts by payer, understanding the rates and volume by code, and the portion of your business each payer comprises.

Second, compare those rates to your reimbursements – often we uncover billing problems that can result in claims recoveries. (Note: AveaOffice makes doing these comparisons fast and easy. Sign up for a product tour and we can show you.)

Lastly, try to take an unbiased look at your value proposition from a payer perspective. What’s different about you? Is that quantifiable? Where do their beneficiaries go if you disappear? Have your approaches to this point fit the value you bring to the network? Does it make sense that you’re not getting traction on your own?


Q: If a facility is having an Outcomes Study performed, will those results impact the contracting process?

A: In general, Outcomes Studies and Quality Measurements will help your case. But Payers take the results with an (appropriate) grain of salt, especially if it's not conducted by a reputable third party. I’d compare it to a warranty on a power drill: an imperfect indicator of quality that comes at a price (the higher reimbursement you’re demanding requesting). Some payers will pay up, and some will trust that the store brand will last just as long.


Q: What are the major winds of change in the industry from a contracting perspective?

A: They mirror the major forces re-shaping the industry at large:

  • Government and regulatory actions
  • Societal acceptance of addiction as a medical condition
  • Don’t underestimate local market factors

In terms of provider-friendly regulations, our focus remains on Parity ramifications. The current line is that plans will be measured against each other based upon how often they deny mental health benefits. The market for insurance can then do with that information what it will. Will measurements be enough to shift patient populations between plans? Possibly. Will more money be spent on addiction treatment overall? Not overnight. An equilibrium between authorization and denial must exist to enforce quality, and health insurance premium increases applied to one specialty are finite, so I wouldn’t expect your authorization issues to disappear.

That said, Parity alongside the continued acceptance of addiction as a medical condition are undoubtedly “good” for the covered population suffering from substance use disorder. As a larger portion of beneficiary populations seek treatment, more managed care dollars will be allocated to SUD treatment - a lagging shift largely-funded by premium bumps. Increased managed care allocation weakens one of the primary supports propping up the cash-pay treatment industry as consumer demand for network coverage increases.

The scary part for providers transitioning to managed care is that aspects of their program or facility that have been positive differentiators in the past could quickly fall out of favor with their new customer base - the MCOs. The urgency of this concern will vary widely by locale. Again, ask yourself if a given payer in your region is looking for network adequacy or is tinkering for quality? Does that differ by level of care? Where do your offerings fit?

Over the long-term, having the clinical credibility to maintain constructive dialogs with MCOs could create a competitive moat for providers nimble-enough to react to market needs.


Q: How can PANLR move the needle for treatment facilities? 

A: Our goal is to extend access to high quality treatment. By facilitating in-network contracts, we help ensure that beneficiary populations can seek treatment from and afford quality providers. Simply put, we want to make sure the best providers are rewarded for being the best.

To do so, we developed four core competencies that providers typically lack in-house: 

Nationwide Rolodex – PANLR employs contracting experts in every region of the country, ensuring that each client negotiation begins on the foundation of a positive working relationship.

Process Expertise – As you learned above, efficiency matters. PANLR has no competing priorities to contracting, which helps ensure negotiations are completed as quickly as possible.

Specialty Focus – PANLR focuses primarily on the SUD Treatment vertical, where unique managed care asymmetries demand a unique focus.

Consistent Dialog with MCOs – Through on-going negotiations, PANLR remains informed of different Payers’ strategic priorities and how those priorities are reverberating through the MCOs. Because our organizational goals reach across Payer-Provider battle lines and our work facilitating contracts makes Payer-side contractors’ lives easier, Payers typically enjoy working with PANLR.


Connect with the Expert

If you’d like to discuss your organization’s managed care strategy and inquire about retaining PANLR to help execute, President Kevin Isaacs is offering readers a complementary contracting strategy session, which you can book here.  


About AveaOffice

Avea's Revenue Management Platform is proven to boost reimbursement and collection cycles for behavioral health facilities to the tune of 40%. Unlike systems designed for general medical billing, or simply using spreadsheets or clearing houses, we’ve built workflows and intelligence that are unique to Behavioral Health, learned from processing millions of Behavioral Health transactions, straight into our platform. Learn how we can help your organization increase your reimbursements, save your staff valuable time and reduce billing errors.


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Topics: "Reimbursement rates", "negotiating contracts with payers", "addiction treatment billing"