Impending Death of Hospitals

Payor Contracting is a Process, Not an Event

April 11, 2016

My friend Steve had a paper route, delivering the LA Times on his bike early in the morning.

For Steve, delivering the paper wasn’t a one time event, say just on February 16, 1964. It was an every day, Monday through Sunday task.

Your group’s or facility’s negotiation of payor contracts is no more of a one time event than was Steve’s working his paper route.

Then why do so many groups think that payor contracting is one and done? Who knows! Maybe because it’s easier. But that’s the worst reason.

The whole notion of payor contacts is to get paid. Paid as much as you can.

But it’s much more than that. It’s to be paid as much as you can under the best possible terms.

Structured properly, your business has a payor contracting process that’s continuously in motion: Contracts are negotiated. They are signed. They are reviewed at least semi-annually for performance, rates and terms. Underperforming contracts are evaluated for renegotiation or termination. Renegotiations and new negotiations take place. The process then cycles forward again and again.

Fifty some years later, someone is still delivering papers along Steve’s old route.

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