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Renegotiating Rates: Part 1

Therapist preparing to do research to negotiate her contracted rates

One question that we receive frequently from the mental health clinicians that we work with is “How do I negotiate my rates with the insurance company?” We’ve come up with a two-part response to this question, as it involves many nuances like most things pertaining to insurance billing. In this post, we will cover some of the basic information that you should know and consider before going into any negotiations with the insurance company. In a follow up post, we will get more technical in how to build your case for a rate increase, and the methods that you can use to negotiate.

We get it- the art of negotiation is challenging! Our goal is to provide you with information and tools that can give you confidence in advocating for yourself as a private practitioner.

Step 1: Go Back to Your Contract

A common theme that you will see throughout many of our blog posts is that we always revert back to the contract that you would have signed with the insurance company when you credential. The contract is useful for many different reasons, and in this instance your contract may actually address the idea of rate increase requests specifically. Read through the contract and see if they include a clause about rate increases, or instructions on their process for negotiating rates. Since this is something that the insurance companies deal with frequently, they may have an existing process outlined for you.

If there is no information in your contract about how to initiate an increase in your fee schedule rates, the next place that you can look is on the insurance company website. Look for an area of their website that is for providers, or perhaps log in to a provider portal if the insurance company has one. This is where you may find more information on their process for rate increases.

If you are unable to find information in your contract or online, you can reach out to your provider representative at the insurance company. They should be able to provide a starting point for you on the rate negotiation process, including which department you would need to contact, and what information you might need to have.

Step 2: Reach Out to Colleagues

Networking is an important part of any business, but when it comes to running a private practice, having colleagues that you can share experiences with is a valuable resource. If you are considering negotiating for higher rates with an insurance company, ask colleagues in your area if they have gone through the process and if they have any tips that they can share. Speaking with a colleague in your area who is also an in-network provider with the same insurance company will be the most helpful since it will be an apples to apples comparison, but if you do not have that connection then you can ask a provider who may have had success with renegotiating rates at a different insurance company or in a different area. Just keep in mind that insurance rates are influenced by where you are, and which company you are working with.

When speaking with another provider, there is no need for sharing individual rates as those are proprietary information. Keep the conversation to the process of negotiating, and tips to succeeding in rate increase requests. The important thing is to understand what the experience is like, not necessarily the details of someone else’s pay.

Step 3: Do Your Research

When you are requesting a rate increase, one of the keys to success is to make your request reasonable. You will want to have a good understanding of what a fair rate is for your services, in your area, and at your level of expertise. As we mentioned before, fee schedules and rates from private insurance companies for individual providers are proprietary information so this research can be a bit daunting.

The best place to start when researching information about insurance rates is Medicare and Medicaid. Since these are government programs, the reimbursement rates are publicly available. Comparing your current rates to the rates offered for Medicare and Medicaid programs can provide you with a good benchmark. If your rate is on par with the government insurance reimbursement rate, then it may actually be a fair payment schedule. If your rate is under the rate of government rates, then you may be more likely to succeed in a rate increase request. If your rate is significantly higher than what is paid through Medicare and Medicaid, success in increasing your rate may be lower, depending on several other factors such as education level, availability of services in your area, and cost of living in the area.

In the follow up post to this, we will dig a little deeper into the aforementioned factors and how they play into rate calculation. Be sure to subscribe to the blog to be alerted when we publish a new post! If you are looking to maximize your practice’s income through insurance billing, be sure to check out our billing services, and contact us for a free consultation to see if Practice Solutions might be a good fit for your practice.

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