Yes!


How to Negotiate With An Insurance Company for Higher Rates


You may work for yourself, but that doesn’t mean your reimbursements should not increase as would your wages with an employer.  Most practitioners do not take the time to appeal for higher reimbursements, which could make a huge difference in the amount that you are paid out.


When should You ask?

The first time you should negotiate rates is when you initially credential with a panel. When you complete the credentialing process you will receive a contract to sign and return so that it can be executed (activated). You should receive a fee reimbursement schedule along with your contract. Some panels are better than others at sending this schedule with the contract. Sometimes you must request it. Never sign a contract without first reviewing the rates. 

You can immediately ask about negotiating the fees.  Some insurance companies have a mandatory waiting period, like one or two years before you can request an increase. You should find out their policy immediately. You can set a reminder in your calendar and request an increase as soon as it is available. Generally, you can request an increase each calendar year.

How Do I Know How Much I Agreed To?


When you sign up with an insurance company and are approved to be contracted, your agreed upon amount is detailed in your contract.

An example of this:


COMPENSATION 5.1 Acceptance of Payment. Provider shall accept as payment in full from BCBS for rendering of Covered Services to Members, the compensation specified in one or more Attachments to this Agreement. Payment in full means there will be no subsequent settlement for any provider type by BCBSM unless specifically provided for in another provision or Attachment of this Agreement.  


(Your payment rates would be attached to your contract for your review). 


The agreed upon amount is usually determined by the insurance company based on your:

  • Location, paying more for under-served locales and less for over-served locations.

  • License, education, and specialization.

  • Specialization. (or your taxonomy code)*

  • Consumer demand at the time of signing your contract.

If you determine that the offered rate is lower than what you would expect (or accept), you can draft a compensation letter to appeal for a higher reimbursement rate.  As mentioned, you can do this before you sign your contract.

 

How Do I Ask For a Higher Rate?

 

Get Prepared!

 

1) Create a list of differentiating factors, including: cultural diversity, multiple languages spoken, emergency or crisis treatment, seeing a large quantity of their clients, serving under-represented locations, early morning, late evening, and weekend hours, do you do home visits, specialize with kids, chemical dependency or dual diagnosis, autism, or veterans. Add specializations requiring education and certificates. Use the buzz-words that patients and panels are looking for (i.e. EMDR, couples therapy, specializations in eating disorders - sell yourself!)

2) Have you continued your education and learned new modalities of practice? Add these under a new section “Continued Education”. Panels want to see you are expanding your service offerings through time.

3) Write down your current contracted rate for common CPT codes for that panel. Look up the regulars: 90791, 90834, 90837, 90791, 90847 and write down the rates you are paid (the insurance payment + the patient responsibility).  [See our guide to CPT codes here]. **If you are asking for a higher rate when initially applying, you can use your common reimbursements from other carriers or how much you are typically paid by a private pay patient.

4) Multiply your contracted rate for each CPT code by “1.05”. This means you are negotiating for a 5% raise which will feel substantial in your bank account but isn’t outrageous by most standards. (Don’t worry, you can negotiate on a semi-regular basis).

Draft a Compensation Letter

Suggestions for formatting your letter:

  • State your intention of the letter: to apply for increased compensation based on merit and expertise.

  • State how long you’ve been contracted with that panel. Include the number of patients you see on a regular basis from that panel as well (the higher, the better).

  • Explain your specialization, credentials, skills, and differentiating factors.

  • Discuss your continued education and new services provided.

  • Create a simple table listing the CPT codes you most commonly bill for and your suggested new rates.

  • State your enjoyment of working with this panel and that you hope to continue working with them for another X years.

Here are some other specialties that health plans have been known to pay more for:

  • children and adolescents

  • ADHD and Autism, especially using ABA techniques

  • PTSD / trauma, especially using EMDR

  • substance abuse or other addictions/compulsive behaviors

  • eating disorders

  • veteran’s issues / military families

  • chronic pain

  • severe mental illnesses / personality disorders

  • ability to speak languages other than English, including sign-language

  • crisis/emergency care

  • Willingness to treat psychiatric inpatients after their discharge

 

Reaching Out and Applying

Call the Provider Relations Department for your panel and ask about where and how to apply for a raise — each panel is different.  

 

Usually you’ll get information about faxing or mailing your request and if not, ask for it.  Ask for full name or names of representatives who serve these requests, as a letter written to someone specifically is better than a letter written to “Admin”.  You may be forwarded to a representative on the phone, in this case approach the conversation in a friendly and amenable manner and state the reasons that you’ve listed in your appeal letter in a clear and concise manner.