Private practice Post #1: Negotiating With Insurance

Originally wrote this on an older account but figured I'd rewrite it again since we're getting to the end of the academic year and many residents may be thinking of the private practice route. I'm an early career psychiatrist, have a practice that's been going steady now for just over a year. Figured I'd make a post series about private practice. Some of this will be psychiatry dependent but I think most is applicable to other specialties.

You'll often hear that it's impossible to negotiate rates with insurance if you're a solo practitioner. I believed this as well. However, after joining a few Facebook groups dealing with insurance, I've found out that this is actually not true. I've successfully negotiated insurance rates with the majority of insurances I'm credentialed with. Here's how it's done, hope people find it beneficial.

If you're credentialing for the first time, use this template after they send you the rates, responding back to the person who sends you the contract. If you've already signed, find the provider relations representative for your area. Call them and ask them who you should contact to request a review for a rate increase. Send this email to that person.

Hello,

We would like to request a review for a rate increase for our practice, [PRACTICE NAME] TAX ID: [EIN/SSN], NPI: [YOUR NPI]. We are seeking a review of our contracted rates with [INSURANCE NAME]

[Write a little blurb about your practice here, highlighting anything that makes you unique.] We are well known in our community as an evidenced-based, effective, and empathetic medical group.

We have analyzed [INSURANCE NAME] and have determined the rates in our current agreement are not competitive with other payer agreements we have.

For this reason, we cannot continue to see clients at the current reimbursement rate. (Remove this line if you're negotiating before signing)

These are the current reimbursement rates for the CPT codes we utilize through [INSURANCE NAME]:

90792:
99204:
99205:
99214:
99215:
90833:
90836:

Our out of pocket rate for these codes are as follows:

90792:
99204:
99205:
99214:
99215:
90833:
90836:

These are our current reimbursement rates with other insurance companies for the same CPT codes: (Report reimbursement rates for any insurances that are above this insurance rate, without naming the insurances. Many insurance companies will give rates below Medicare rates so use that as your baseline).

90792:
99204:
99205:
99214:
99215:
90833:
90836:

We are requesting an increase to the following rates to remain contracted with [INSURANCE NAME]: OR
We are requesting an increase to the following rates in order to contract with [INSURANCE NAME]:

90792:
99204:
99205:
99214:
99215:
90833:
90836:

Thank you for your consideration and we request a response by email at [EMAIL] or fax [NUMBER] within three (3) weeks.

[NAME AND SIGNATURE]

I used plural because the emails are sent from my office manager (aka wife lol). You can use singular as well but I thought maybe using plural would make it seem like a larger practice. No idea if that makes any difference.

For my best insurance, I was able to negotiate a 40% increase, putting it slightly ahead of the cash pay rate I was charging. I know someone who was able to get rates doubled (100% increase) but they were a child psychiatrist and in much more demand than an adult psychiatrist like me.

I can't guarantee that this'll work and I have had insurances who've basically responded, "lolno", but there's literally no downside to attempting to negotiate.

Hope this helps anyone contemplating or starting out in private practice.