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How to Terminate Contracts to Boost Revenue

Greg Freeman, for HealthLeaders Media, March 4, 2011
Not likely to come back

For starters, you must give notice to patients covered by that payer, and the patients will not be happy about the news, Schmitt says. Patients should be notified individually, and a notice should be posted in the lobby stating that you no longer accept the payer’s coverage, but you will still see the patients if they wish to self-pay.

“The front office should be prepared to convey this information and discuss it in a caring way because this  is a difficult issue for patients. They take it personally,” he says. “You can’t just say, ‘Oh, we don’t take that  anymore.’ ”

Don’t terminate or threaten to terminate a contract in hopes of getting a better offer from the payer, Schmitt says. If the payer were going to make you a better offer or provide better service, it already would have before you got to the point of termination. Likewise, don’t expect the payer to court you in the future. The relationship will be strained at best, he says. 

“Will they come back later and try to make it all better, change their ways and give you better rates?” Schmitt says. “Well, some divorced couples get back together. But don’t count on it. Usually it takes a new era of management to come in at the payer and change things around, then they try to show you they don’t have the same problems as before.”

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