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Survey says hospitals are looking for higher contracting rates with largest payer

August 28, 2012
Uncategorized By LW Consulting Inc.

Hospital providers have been concerned with developing accountable care as well as lowering costs for all. In order to accomplish these goals, contracting with health insurers becomes a priority.

Public relations firm Revive Health released an annual survey that gathered responses from more than 400 hospital and healthcare organization CEOs and CFOs who had negotiated managed care contracts with a number of health insurers like Aetna and Cigna, according to Health Leaders Media.

The respondents were asked to rank a number of issues in order of importance regarding their health plan contracting options over the next year. In first place is the need for higher contracting rates with the largest payer. While accountable care organizations (ACOs) and bundled payments offer benefits, a better payment rate is the major way to maintain strong revenue growth.

Another important aspect is to have higher contracting rates with the second and third largest payers in a healthcare system. Hospital CEOs and CFOs also prefer to have better protection against denials, as providers are now more concerned about actual reimbursement yields in comparison to denials.

"Hospitals are saying that they know they can't get 9 percent anymore, but if they negotiate 6 percent then that's what they need to get," Brandon Edwards, president of Revive Health, told the news source. "Hospitals recognize that trend isn't going to be their friend anymore so they have to do better on yield. They are looking for ways to protect themselves."

An interesting find from the survey is that the lowest priority for hospitals right now are bundled payments and the development of ACOs or patient-centered medical homes.

Healthcare providers looking for superior contracting options should consider conferring with a medical billing consultant offering healthcare strategic planning services.