Negotiation: One of the Best Returns on Your Investment of Time

Contract Handshake
By Robert Hall, PPS Senior Consultant/Payments Specialist

What can you do to quickly create value for your practice?

Lots of strategies are advisable, but one of the best ways to improve your bottom line is to closely review provider payment contracts that are offered to you. Contract review may not be why you entered the physical therapy profession, but if you leverage the time it takes to review, negotiate, and improve your contracts, the positive result can be more time for your patients and for yourself. The following are three tips for better contract negotiation.

First, recognize that contracts are not only about the price for each service you provide. Overhead for most practices is a huge cost that can be brought down by negotiating some key terms to make the flow of filing reimbursement requests and eventual payment much smoother. And before you scoff at the idea of negotiating with a payer, consider trying it. Your work has value to the health system; payers should not be the only parties to define that value. If you can negotiate a better contract, the cost of a few hours of your time can be made up by more favorable terms, or higher pay for each step of your work.

Second, think about how the negotiation may play out. The seminal negotiation book Getting to Yes urges thought not just about the positions of the party on the other side of the negotiation table but about their interests, as well. Positions are surface statements or where a negotiating party “stands” (“We will pay you $30 for CPT Code 97140”). Interests are a party’s underlying reasons, values, or motivations for those positions (“I have tremendous pressure to hit my numbers for the quarter and I really want that promotion and raise because I need to pay for my child’s college”). Interests explain why someone takes a certain position. What pressures is the other party experiencing? Are they under some requirement to show community benefit or implement a bewildering value-based insurance program? How difficult are their days when dealing with the related pressures of internal corporate demands, shareholders, and negative public opinion? It is amazing how far you can get just by “sipping tea” with the other party prior to a formal negotiation with them. And because PTs are generally pretty nice people, other parties to the negotiation may be much more willing to discuss their lives and pressures with you than with a hard-charging lawyer.

Third, use the PPS resources available to you—especially after a payer has offered you a contract. One of the best resources I have seen for specific contract negotiations is a PPS tool comparing common PT-friendly contract terms versus payer-friendly terms, noting which is best for you and which is best for the other party. It is available after you sign into the PPS website: And don’t let its 27-page length intimidate you. Here are some questions covered in this tool:

  • Is the contract clear on which state governs conflicts? Answer: It’s better for you if it is your state.
  • Is it better for you to own the records for each patient or to share that ownership with the payer? Answer: Records should be yours, and the payer should agree to pay for each page of copies they request.
  • Is the contract clear about whether your insurance covers the payer’s mistakes? Answer: If not, negotiate that their mistakes are their responsibility. Don’t sign a contract that requires you to have insurance but does not require the same of the other party.

Each of these issues should be negotiable in a legitimate contracting back-and-forth dialogue, and finding common ground on each can be a real boon for you and ultimately, your patients.

The motto of your PPS Payment Policy Committee is “Don’t Discount Your Value.” This requires you to take the steps to know your value and to push back when parties in negotiations try to pull a fast one at your expense. Good lawyers prepare for at least eight steps of a negotiation back and forth. It behooves you to take some time considering what you want, what proposed contracts actually require, and to negotiate effectively so that your margin can support your mission.

Copyright © 2018, Private Practice Section of the American Physical Therapy Association. All Rights Reserved.

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