Negotiating a Managed Care Contract

Most organizations use managed care contracts for their financial strategy. Managed care
revenue can be a significant share of the healthcare income, and effectively negotiated contracts
have a positive impact on preserving revenue as well as yielding additional dollars through new
products and models. Additionally, effective managed care contracts improve customer
satisfaction since they help them to access comprehensive treatment and services. In successfully
negotiating a managed care contract, both parties should mutually benefit in multiple ways
(Krohn, 2017). Essentially, reaching an agreement in any contract requires preparation,
collaboration, and compromise. The organizations that have solidified their expectations in their
contract are likely to attract acceptable terms. Setting an effective care contract requires keeping
the focus away from the rates and establishing long-term goals for the agreement.
While the amount the hospital gets as reimbursement is essential, it is less significant
compared to other factors that make contracts successful. The facility should consider the impact
the payer has on its overall workflow, issues such as responsiveness of the payer to the claims,
execution of new policies, and whether or not they accept delegated credentialing. For instance,
delegated credentialing streamlines the patient access to new services by lifting physicians and
practicing swiftly. Additionally, the goals should stay put. When initiating a contract,
organizations should consider the kind of payer-provider relationship they are after (Vega, 2018).
One of the ways to determine where the contract will be successful is the length of time the
payers are willing to commit. For instance, an organization could consider a long-term deal
because they are assured of long-term revenue flow. Significantly, compromise is a critical
element in managed care contracts. When disagreements arise between payers and hospitals due
to differences in rates and provisions, each part should be willing to give a bit of ground. Ideally,
successfully negotiated contracts require patience, determination, perseverance, and drive. When
signed, all parties should feel they got most of what they were looking for.
References

Krohn, S. (2017). Successfully Negotiating Managed Care Contracts? Medium. Retrieved from

https://medium.com/@stevekrohn/successfully-negotiating-managed-care-contracts-

792b06ed7695

Vega, K. B. (2018). Successfully Negotiating Managed Care Contracts. HFMA. Retrieved from

https://www.hfma.org/Content.aspx?id=16658