Ask the expert: Making a business case to join a payor network

April 06, 2017
Area(s) of Interest: Payor Contracting Payor Issues and Reimbursement Practice Management 

When physicians identify a payor network they wish to join, typically their first step is to submit a letter of interest or intent signaling their desire to join. However, physicians often fail to adequately present a “business case” as to why the payor would want to add the practice into their network. Failure to present a business case often results in a quick reply from the payor indicating that they have no interest or need to add providers to their network at this time. To prevent the “auto-reply,” the California Medical Association (CMA) suggests you be thoughtful in preparing your letter of interest submission and do the following prior to submitting your letter. 

Step 1: Assess the payor’s specific need for your services
Try to determine whether a payor needs you in its network by researching the payor’s provider directory. Utilizing your own knowledge of the marketplace, review the directory (noting any errors) to get a sense of whether the payor needs you in the network. For instance, if you are a primary care physician, but the payor directory shows an abundance of participating primary care physicians within your area who are accepting new patients, then making the case that the payor should add you to the network may be a tough sell. On the other hand, if there are very few participating physicians in your specialty in your area, you are likely in a better position to be considered for participation by the payor.

Step 2: Identify the uniqueness of your practice
Think about what makes your practice special and sets you apart from others, then tell the payor about it. The payor needs to understand why it wants you in its network. For example, do you speak multiple languages in the practice, or offer a unique service to your patients? Identifying why your practice is different is an important step in getting the payor’s attention and increases the value of your participation into the payor network.

Step 3: Draft your letter of intent to the payor
The purpose of the letter of intent is to get the payor’s attention. You want to focus on why your practice should be considered for participation in the payor’s network, including what sets you apart. You are marketing your practice, so be clear and detailed in your letter.

Typically, requests to join a network are best sent to the payor’s contracting department. Some payors now require you to submit your letter of interest via e-mail rather than via fax or mail submission. If you are not sure where to send the request, you can refer to CMA’s payor profiles.

To help physicians prepare for contract negotiations or renegotiations, CMA has published a guide to help members present a compelling business case. “Contract Renegotiations: Making Your Business Case” is designed to help physicians to identify negotiating leverage and the uniqueness of their practice, how to analyze the economic impact a contracting offer may have on your practice, and how to draft an attention-getting written request for renegotiation.

The document also includes a sample letter that can be completed and submitted to the payor to request a renegotiation of your contract. The guide is available free to members only on the CMA website.

Contact: CMA's reimbursement helpline at (888) 401-5911 or economicservices@cmadocs.org.


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