Here are four tips for negotiating outpatient spine contracts with payors.
1. Go after contracts with appropriate payors. Spine is a device and implant-intensive specialty and the contracts you might already have with private payors for general orthopedics may not be adequate for spine. "Many times, if you are looking to add spine to your center, the representative from the payor might be resistant to allowing changes in the contract to ensure you are fully reimbursed for your expenses," says Dan Beuerlein, regional vice president of operations at Symbion Healthcare. "Many payors will have a maximum amount of what they will pay for a procedure. If your implants and hardware aren't covered as a separate line in the contract, you could find that you're doing those cases at a loss." Surgery centers can spend months negotiating carve-outs for spine surgery or renegotiating existing contracts to get spine cases into the center.
2. Show your setting is appropriate. Insurers will always note that spine procedures are not in the Medicare-approved list for outpatient surgery. "You have got to prove these procedures can be done safely outside of the hospital," says Matt Searles, a managing partner at Merritt Healthcare. For a particular procedure, demonstrate that your spine patients do not have to be sent to the ED, that there were little or no overnight stays (which are possible in 23-hour facilities) and that the center's infection rate is lower than the hospital's.
3. Compare your rates with other plans. The ASC can obtain information on reimbursement rates for spine procedures in the hospital and show that its rates would be much lower. "The rates we negotiate are 30-40 percent below what the hospital charges," says Jay Rom, president of Blue Chip Surgical Center Partners in Cincinnati. You can also cite contracts from other states where surgery centers successfully contracted with the payor for outpatient spine. Citing ASC spine contracts with a Blues plan in another state can help in negotiations with another Blues carrier but it will not be very convincing to other payors.
You can also bring up out-of-network plans during the discussion. Stress that the payor will have a chance to get payments below the ASC's current out-of-network rates. "The higher out-of-network rates are a good incentive for the payor to negotiate an in-network rate," Mr. Rom says.
4. Make sure prices will cover the procedures. Only offer the payor a price you can live with. Make sure all the costs are included in the price quoted to the payor. The cost of an implant, for example, can vary substantially. An ACDF implant system can range from $1,200 to $4,000 and you have to ensure your reimbursement covers overhead, supplies and implants. If the payor needs extra reassurance, connect them with other surgery centers that successfully perform outpatient spine surgery.
1. Go after contracts with appropriate payors. Spine is a device and implant-intensive specialty and the contracts you might already have with private payors for general orthopedics may not be adequate for spine. "Many times, if you are looking to add spine to your center, the representative from the payor might be resistant to allowing changes in the contract to ensure you are fully reimbursed for your expenses," says Dan Beuerlein, regional vice president of operations at Symbion Healthcare. "Many payors will have a maximum amount of what they will pay for a procedure. If your implants and hardware aren't covered as a separate line in the contract, you could find that you're doing those cases at a loss." Surgery centers can spend months negotiating carve-outs for spine surgery or renegotiating existing contracts to get spine cases into the center.
2. Show your setting is appropriate. Insurers will always note that spine procedures are not in the Medicare-approved list for outpatient surgery. "You have got to prove these procedures can be done safely outside of the hospital," says Matt Searles, a managing partner at Merritt Healthcare. For a particular procedure, demonstrate that your spine patients do not have to be sent to the ED, that there were little or no overnight stays (which are possible in 23-hour facilities) and that the center's infection rate is lower than the hospital's.
3. Compare your rates with other plans. The ASC can obtain information on reimbursement rates for spine procedures in the hospital and show that its rates would be much lower. "The rates we negotiate are 30-40 percent below what the hospital charges," says Jay Rom, president of Blue Chip Surgical Center Partners in Cincinnati. You can also cite contracts from other states where surgery centers successfully contracted with the payor for outpatient spine. Citing ASC spine contracts with a Blues plan in another state can help in negotiations with another Blues carrier but it will not be very convincing to other payors.
You can also bring up out-of-network plans during the discussion. Stress that the payor will have a chance to get payments below the ASC's current out-of-network rates. "The higher out-of-network rates are a good incentive for the payor to negotiate an in-network rate," Mr. Rom says.
4. Make sure prices will cover the procedures. Only offer the payor a price you can live with. Make sure all the costs are included in the price quoted to the payor. The cost of an implant, for example, can vary substantially. An ACDF implant system can range from $1,200 to $4,000 and you have to ensure your reimbursement covers overhead, supplies and implants. If the payor needs extra reassurance, connect them with other surgery centers that successfully perform outpatient spine surgery.