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How Payers Can Leverage Data in Contract Negotiations

Analysis  |  By Marie DeFreitas  
   June 13, 2024

Accurate payer-provider data exchange is critical to negotiations. If one party does not have plentiful, accurate data, it can hurt everyone involved. 

The tug-of-war between payers and providers hits the precipice at the negotiating table. Contract negotiation is more than just tough business, and the strategies each party takes to the table can be do or die for any organization.    

Before going into a negotiation, both payers and providers need to put in some research.

For example, providers must ensure they’ve reviewed their contracts and create a habit of doing so often. On the other hand, payers must also ensure they are up to date on their contracts and can supply providers with accurate information and data throughout the negotiation process.

When it comes to successful negotiations though, leveraging data is an important strategy for payers to utilize.

Let Data Drive the Discussion

Both payers and providers should know their target statistics, both financial and strategic, and how they need to be adjusted. If each party comes amply prepared with data, it makes it easier to see where the numbers, like KPIs, protocols, and evidence-based medicine data sets need to fall. Each should ensure that they understand their data, the key issues for their organization, and the solutions that will be viable for both parties.

When it comes to the payer’s role in data, Piyush Khanna, vice president of clinical services at CareFirst Blue Cross Blue Shield, says payers can help provide accurate data for providers so they can look at information in the same way payers do.

“When we go into the negotiation we can put that data in front of [the providers], but we need to also make sure they have access to it throughout the contracting process, so they have more real-time intervention capabilities to influence patient outcomes,” Khanna said.

With higher use of EHRs and more clinical data repositories available to both the payer and the provider, Khanna said that the data is there, but it can be unorganized and slow to make an appearance.

“We can certainly leverage the power of the data, and we have to remember data has been traditionally fragmented in healthcare,” Khanna said.

“I think clinical data access in more real time will become more relevant. Because whether it's progression or regression on outcomes, you want to have more leading indicators that are available through the clinical data set. That is something I see as more leveraging and making it into contractual aspects as well, especially on readmissions.”

While data that reflects the needs and goals of each organization is highly important, data that reflects cost utilization and expense can truly drive the discussion home. At the end of the day each health care leader involved knows that sustainable profitability is crucial to keep an organization in business.

Stepping into the negotiation room with an open mind, hard numbers, and flexibility will be vital, no matter which side of the table you are on. The more data, the better. If you are approaching the negotiation table with exact numbers, you’ll be able to articulate exactly where your organization can be flexible, and where it cannot.

Read this entire cover story here.

Marie DeFreitas is the finance editor for HealthLeaders.


Payers can play a key role in providing accurate data to providers throughout the negotiation process, allowing for real-time intervention capabilities to influence patient outcomes.

Data reflecting cost utilization and expense is crucial in driving discussions on sustainable profitability for both payers and providers.

Approaching negotiations with open minds, hard numbers, and flexibility is essential for reaching mutually beneficial agreements.

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