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In this episode of MGMA’s Women In Healthcare podcast, consultant Doral Jacobsen, MBA, FACMPE provides insights into healthcare payer contracting strategies while sharing personal growth lessons.
Host Adrienne Lloyd, MHA, FACHE and Jacobsen discuss recent trends impacting negotiations, successful negotiation tactics, contract timeline best practices, the use of AI and data in negotiations and Jacobsen’s internship program focusing on professional development.
Editor’s note: The following Q&A has been edited for length and clarity.
What are some recent trends or developments you're seeing that are influencing payer negotiations for medical practices and systems?
Medicare Fee Schedule cuts are super impactful and are really driving the need for practices to talk to their payer partners about getting increases, because as medical CPI (cost per index) increases or cost or provide care increases, the money has to come from somewhere. Another thing from a trend perspective that we're working on a lot with our payer contracting clients is administrative burden. For example, I have a GI client right now and in this particular state, we have a flurry of Medicare Advantage Plans popping up all over the place. This practice is a really big practice in this geography very sought after. And basically they've said if they require prior auths, we don't even want to talk to them. So we had five different payers, talking to three now, and one of them is thinking about taking that off the table because it costs practices money. I think the administrative burden is another big thing.
Also [there are] the ramifications of the pandemic. We have lots of things that are influencing us. There are new protocols that we have in place, so our cost of care has increased. There are lots of things that we need to be cognizant of in terms of how we manage those populations, like reimbursements for vaccines. All of that is really, important and impactful. The last thing that is just really emerging, or has been for the past several years, are innovative models. I say this in my talks all the time, but every negotiation starts with no – that's how they trained us on the payer side. Thinking about it from a more innovative way, what we do in payer contracting work is we want to partner with payers so we all want the same things. For example, I was working with a practice. This negotiation started out with a no. We got on the phone with the VP and talked about how can we collaborate, help you with your HEDIS (Healthcare Effectiveness Data and Information Set) measures and help his practice remain independent. We've come up with some quality measures that we're going to add to the contract so it's helpful to everyone. So, I think that's another driver from a trend perspective.
Is there anything that I heard from your presentation at the MTA national meeting last year on negotiation? I know you had brought your team in and you met and learned from Chris Voss. Are there any tactics or successful negotiation strategies that you can share from that experience?
We do so many things that fall in line with the whole “never split the difference” thought process, but one of the tactics that we use routinely is called tactical empathy. It's really listening to what is happening on the other side and aligning with it, because in contrast to a lot of our peer groups, we don't come out with guns blazing – we are very collaborative in our approach. Most of us are from the payer side, so we understand what it's like to sit in that seat. Aligning with the payer and trying to be a problem solver is where we come from. By being empathetic to the payer we create connectivity, which is probably one the reasons why we're so successful with our clients. That connectivity helps us as a catalyst launch into all kinds of things like discussions about innovative models or different scenarios that we might try out over time to solve problems for a practice.
Another thing that I would say we use quite often is mirroring. When we're trying to get information from a payer, we always start our conversations with asking the payer a little bit about what's happening in their world, how long they've been there and what have been their roles, because folks like to talk about themselves. It's like a launching pad for finding out about new products and new initiatives. We use mirroring a lot so we can better understand what's going on with the payer and we can help the payer understand what the value is that the practice brings. That is helpful in terms of what their initiatives are.
Is there any advice that you would give for healthcare leaders looking to strengthen their negotiation skills as they're moving through these strategies?
Don't be the person that emails the payer and says, “We need a 50% increase tomorrow.” Really get in there, listen, be collaborative and make it easy for the payer to understand the value that your practice brings to the organization and quantify it. Every practice I talked to is a high-quality practice that [looks at], “what did the numbers show and how does that compare to benchmarks.” So looking at that information is going to help you position in a negotiation. Prioritizing it, putting it in the strategic plan and then rolling it out as a long term objective is going to help you make sure that you ask for those increases when you need to. A lot of these contracts have renewal windows, and if you miss them, they're in that contract for another year. So it's really important to get ahead of it.
I think another piece that's really key is setting financial goals, but also, are there innovative models that you're interested in? What does that look like? How do you prepare for those innovative models? And how do you talk to payer partners about launching a potential pilot? I find that practices even if they start down this path, if they don't have a steering process of thinking about the long term and short term goals, we can get off track. So we really need to continue to create a container of, “here's what our short term goals are, here's what our long term goals are,” and then holding up any initiatives to that lens.
I think a lot of times as healthcare leaders, we're running around, we're putting out fires, and it's hard to find or make the time to take a step back. How frequently do you feel like people should look at this and then what is a reasonable timeline [for deadlines and milestones]?
So backing up and starting everything, it's first prioritizing who you want to talk to negotiating those contracts. Then I recommend once you conclude a negotiation, you need to identify the next time you should start it. So for example, if it takes you 12 months to negotiate a contract with United Healthcare, then you should be starting to allow yourself enough time to do that successfully based on history. So what we look at is how long did it take us? And then, as far as frequency, sometimes we have clients that are going back every year with certain payers and others every two years. But what we do see is that payers have a budget line item for increases, and so what we always tell our clients is that we want to get you in that budget, so they will expect that phone call.
A lot of times it's trying to think ahead of, “what do we want to create, who are we here for, where do we want to focus as a practice,” and then letting it flow from there.
One more thing that's worth noting is contracts that are disadvantageous and are too low, those are not to be ignored because they can be very harmful and really ruin your leverage. So if you've got a contract, you go to a payer and you're not able to get it up to market rates, that might be one to exit. Long term strategy is going to help you position to continue to care for your community.
Are there any technologies that you've seen that are coming to help on the negotiation side or just better understanding the data?
We actually worked with AI quite a bit. It is very helpful in so many ways as our interns are always showing us, and that is doing things like crafting correspondence, doing some research for us to help us understand what's happening from a market perspective and a given geography. There is some transparency data that's out there, but it's really hit or miss. So there's some of that, but from a technology perspective, I would say AI is something to be looking at as another hand to help you move a little quicker. Sometimes, there's art to using AI and that's when we really leverage folks that are using it every day to help us there.
Can you tell us a little bit about your internship program? You’ve been doing this for several years now and have a real passion for helping develop others in the field.
We take summer interns and we have usually two or three. What we're doing is having them shadow analytics and consulting so that they see what it's like to be a consultant working in a remote environment and working with payers. When we back it up, it's really a 12-week program. We are also helping them understand how to take care of [themselves] from a professional perspective. For example, one of the things that we do first is talk about self-care routine – how do you create enough space that you get enough rest so that you are focused and that you have enough downtime?
Because as folks launch off into their professional careers, those things can get lost. So at Prosper Beyond, we want to help them prepare not only from a technical perspective, but also how do you step back and make sure that you're living the life you want to live from a professional perspective and take really good care of yourself.
Is there anything that you would share with your younger self or lesson that you've had along the way that you?
One of the things that I'll share is that when I launched this company, it was in the midst of a big blow up in my personal life and it was one of those moments where I really had to decide how I was going to show up in my life – either take control of a situation and lean into entrepreneurship or go get a normal job. So I ended up developing this circle of advisers, folks that were really important in my professional development and who really helped me understand things that were possible from a structure perspective that were really quite innovative. And that was really important to ask for help and to get it exactly where I needed. So that's definitely something that I had to learn along the way.
I left a large corporate life in mid COVID at the end of 2020. As a leader in a big system, there are moments where we still feel alone because we feel like we're carrying things that are coming that we don't want to give to our team. And then there's things that we're trying to figure out before we talk to upper leadership about because we want to make sure we've maybe got some of the answers. So I think it's easy in those formal roles to feel alone. Leaving a larger system where there were lots of people around, there's teams that you're working with to shifting into your own business – that that was a bigger transition for me than I expected. It was helpful for me to be connected. What was that transition like for you?
That was really a big culture shock coming from a giant organization, many large teams that I was participating on, to really everything getting kind of quiet. What was difficult was filling my social cup because my social cup got filled in the corporate environment a lot easier. But it also gave me the permission to launch a new way to fill that social cup. It's a lot healthier now than it was even in those structures, but it was definitely lonely. So I had to seek out new circles, like One Million Cups is something that I would attend, which is an innovation hub here in Asheville. You can really lean into lots of different circles to fill that.
The other piece that was really tough was the lack of structure. I had a lot of structure in corporate America and now it was up to me to define what that structure was going to look like. So that was really a culture shock as well. For me, it's really given me license to [treat it] like it's like a blank canvas – what do I want it to look like? How do I want to spend my time and who do I want to spend my time with? Because when I look back on my experience in corporate life, I was actually in a lot of spaces spending time with individuals and with teams that we're not adding any value to my life. Now I am so protective of my time. It's got to make sense [for me] and it's got to make sense for my team.
Resources:
"I Love It Here" by Clint Pulver
"Never Split the Difference" by Chris Voss
MGMA Resources:
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