Lancaster Physician Winter 2020 - 18

L A N C A S T E R M E D I C A L S O C I E T Y.O R G

Best Practices

Practice Management Insights

ADDRESSING THE ISSUES, CHALLENGES, AND OPPORTUNITIES THAT IMPACT TODAY'S MEDICAL PRACTICES

Insurance Company
Contracting 101
Issues and Ideas

ROBERT D.
ORZECHOWSKI, MBA,
SPHR, SHRM-SCP

Chief Operating Officer,
Lancaster Cancer Center, Ltd.

F

or the purpose of this article, we will assume
that physicians in private practice with individual or group contracts with commercial
or government insurance companies will
at some point in time:
Be asked by the payer to amend their contracts
or decide that they (physicians) will want to
negotiate (or re-negotiate) their contracts.

For many years, the word "negotiate"  had
meanings that hewed closely to its Latin root,
negotiari, meaning "to carry on business." This
definition remains valid in many areas of business
transactions. In the arena of physician-payer
relations, however, the term has lost much
of its implied purity-i.e., even-handedness,
good faith intentions, and transparency. The
payer-provider relationship is rarely on a level
playing field in Pennsylvania, due to a variety
of factors, including the relative power of the
participants and the preparedness and willingness
of each party.
There are numerous step-by-step models available to follow as one prepares to approach a payer
with a request to [re] negotiate a contract. If the

LANCASTER

18

PHYSICIAN

medical practice adheres to basic management
principles, then it should be assumed that
its processes result in measurable productive
ratios, efficient job design, appropriate data
management capabilities, and sound cost and
accounting reporting. It is only within such an
environment of "mission readiness" that the
contracting process stands a reasonable chance
at success.
The list of preparatory activities includes:
* Gathering-and reading-payer (fully executed) contracts and reimbursements
Be mindful of contractual language regarding
notices, terms, definitions, and language that



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