Improve Your Managed Care Contracts Come to ASCA 2018 and find out how BY MATTHEW HUMBARGER


Managed care contracts determine how and if you get paid and have a direct impact on the financial viability of your ASC. In


my presentation, “Negotiate Better Managed Care Contracts,” at ASCA 2018, April 11–14, in Boston, Mas- sachusetts, I will describe the basic constructs of a managed care con- tract, how to formulate a contract- ing strategy and how to execute that strategy successfully.


Managed care contracts are a prod-


uct of successful negotiations. An ASC can maximize its negotiations through thoughtful approaches, with defined goals and value propositions. To prepare, start with learning the


key contract terms, such as “implant reimbursement, “multiple surgery reduction” and “unlisted codes.” Get organized by familiarizing yourself with the contracts you already have. Log your full library of contracts and make sure you know their renewal dates, payment methodology, vol- ume, revenue and when they will have a chance to negotiate on the normal cycle. Reviewing the rates for the top 10–20 procedures will help quantify the value of your contract. Make sure that pre-conceived notions don’t cloud your judgment going into a negotiation. Just because a contract has one unfavorable term does not make it a bad contract. For exam- ple, a contract might not reimburse for implants but might have strong over- all rates. That makes it a good contract. The value that a contract brings is the sum total of all its terms. When developing a contract-


ing strategy, follow these steps dur- ing pre-negotiation, negotiation and post-negotiation. During pre-negotiation, spend your time preparing. Time spent in prepara-


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tion will produce exponential returns when it comes to the final contract. Arm yourself with data—crosswalks, fee schedules, revenue and volume trends. It is worth focusing on how the facility is reimbursed for its top proce- dures and how these compare to Medi- care and other payers. You should also conduct research on the specific payer to know how they are performing in the market. Are they profitable? Are they adding membership or new prod- ucts? Once you have conducted your research, you need to define what you want from the negotiation and why. Clearly set goals and determine what is the minimum required before you walk away. Why should the payer meet your ask? A simple SWOT (strength, weak- nesses, opportunities, threats) analysis will help support your ask through a plan for several scenarios. And be pre- pared to walk away. In the negotiation phase, you are laying out your case, defining your ask, communicating your value proposition and supporting your ask. There are a few general negotiating tactics that you should learn and execute. Under- stand what value you are bringing to the payer and how mutually beneficial


ASC FOCUS APRIL 2018 |www.ascfocus.org


solutions can play out. Establish cred- ibility by being an expert on your busi- ness and understanding how you can help the payer. Be creative in how you present solutions by establishing trade- offs and multiple equivalent simulta- neous offers. The effect of clearly sup- porting your ask and articulating the value your ASC provides to the payer cannot be overstated. After you have reached agree- able terms, the post-negotiation phase begins. Assess the contract to ensure it is performing as expected. Also focus on maintaining your relationship with your payer. This will better pre- pare you when you need to negotiate again or have questions/issues as the new terms get implemented. Shoot off a non-work-related email or meet for coffee or lunch.


Information and preparation is crit- ical to a successful negotiation. I will share more at ASCA 2018. See you there.


Matthew Humbarger is the senior director of payer engagement & strategy at Surgical Care Affiliates in Deerfield, Illinois. Write him at Matthew.Humbarger@scasurgery.com


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