I’ve ranted about how “getting big” is not an automatic recipe for success when negotiating with insurance companies. It’s rare, in my experience, that the cost of merging offices is outweighed on the contract end.
Here’s an email I got just before the weekend. This isn’t a 15-20-40-80 doctor practice. This isn’t the only pediatric office in town. This is a 5-provider group in the northeast with probably more pediatricians per-square mile than anywhere else in the country.
What is their secret? They said no. I’ll let you read for yourself:
Chip–Just wanted to let you know that I have just agreed to a new contract with [national payor] for their capitated plans which includes what I think are significant increases for us, in ALL [naional payor] plans for years 2 and 3 (see details below.)
I have to admit just how right you are. Nothing happened in over a year of discussion until we notified our patients 7 months in advance that we would be dropping the plans–and really nothing happened until there were less than two months until the drop date. Plus, I kept rejecting their offers, with the statement that we would just proceed with our original plans to drop, and they kept enriching the offers.
Those practices learning this lesson are waking up to substantial increases in their bottom lines. Sadly, I still hear from too many practices who are still to afraid. I’m going to keep posting these stories until everyone gets it.