Just say "NO"!

I’ve had several clients recently ask for help in decisions that ultimately led to their dropping out of low paying insurance networks. More Practices should be thinking about doing so!

There is good business and bad business. Its important to know the difference. Too often Practice owners are drawn into a poor paying insurance networks for the wrong reasons:

1. Fear of being left out of a market segment

2. Fear that a competitor will get the contract instead of them

3. The assumption that if other Practices are accepting the contract that it must be OK

4. Irrational justification that somehow there is value in volume even when it is not profitable

5. Worry that referral sources may not refer unless all referrals are accepted

6. The assumption that the fees offered are non negotiable

The rationale for not entering into poor contracts includes:

1. Less work can mean less expense while yielding the same profit - right size the Practice and enjoy some well deserved time off!

2. Let competitors have losing contracts since it diminishes their capacity to compete for more favorable business - go ahead burden the competition!

3. The acceptance of poor contracts reinforces payers behaviors that lead to further erosion of reimbursement - Every low rate accepted encourages all payers to do it again!

4. Word gets out... if you accept poor paying benefit plans your Practice will attract more such plans and clients and less of the rest - go after the market you want!

5. The time freed from serving poor paying plans can be used to innovate new services, enhance skills, and market for the more favorable clientele you want!

5. Social responsibility can be maintained by establishing a realistic budget for un-reimbursed care to limit the Practice’s financial exposure.

In order to make good decisions on what networks to participate in one must first fully understand their true cost of services and what a healthy profit margin is for their Practice.

It’s important to keep in mind that there may also be contractual complications to consider – e.g. favored nation clauses in other payer contracts and high risk Medicare compliance issues.

Its easy to "Just Say NO". But first, do your homework - know when "NO" is the right answer for your Practice and you know why you want to say it!

Its time to take a hard look at who is in your portfolio of payers. Like poor performers in a stock portfolio, it may be time to get rid of some of the dogs.

Bob

Copyright 2007 Performance Builders