Dealing with low-paying insurance companies is a common struggle among many group practice owners. While therapist associations and advocates work hard at holding insurance companies accountable for fair practices and reimbursements, I want to talk about how group practice owners at ground level can improve their reimbursement rates with insurance companies.
After a decade of working with insurance companies, here are a few things I have learned that should help you maximize your insurance reimbursements:
- You should bill your full rate when submitting a claim to insurance. Many private practices don’t bill insurance companies at their full rate; rather, they bill their contracted rate with each insurance company. As a result, insurance companies will not increase rates because they don’t have accurate data on what standard rates are in each area.
- You can request a fee schedule increase (so many group practice owners don’t know this).
- You should request an increase yearly. This should not be a one-time activity.
- When an insurance company denies your request (which inevitably will happen), don't let it go; you absolutely should appeal that denied request.
Let’s talk about the fee schedule increase request letter, which is what insurance companies will look at to determine if they will in fact give you a higher reimbursement rate. There are several key pieces of information that they are looking for when determining whether to provide an increase:
- Number of clinicians in your group practice
- Number of years paneled with the insurance company
- Specialty area(s), especially ones that are in high demand, such as EMDR, Neurofeedback, or medication management
- Being a niche group practice or being multidisciplinary or multi-specialty
- Night and weekend availability
- Therapy services offered in other languages
- Being in an area that does not have a lot of therapists paneled with that insurance company
- The number of clients your practice serves that use that insurance company (either as a percentage or actual number, whichever has a greater impact. i.e. 25% of our practice uses so-and-so insurance, or 250 of our clients use so-and-so insurance)
A fee schedule increase request letter is more likely to be approved when you discuss one or more of the above areas. Additionally, it’s important to show how they fare compared to your full fee or other insurance companies you are in network with that have better rates. Although your rates are confidential, you can list the rates you currently receive from other insurance companies (that are higher than the one you are requesting an increase from, of course) without listing the insurance name. This provides them with important data that they can use to compare where they are at to other insurance companies in the area. It also lets them know that you know where they stand in comparison to other insurance companies.
Lastly, when figuring out how much of an increase to request, I go by the $20 or 20% rule (and requesting whichever number is more). Insurance companies will rarely increase your rates by $100, and I’ve found that they are most agreeable to increases in these levels. When they say no (or come back at a lower rate), write an appeal letter expressing your lack of acceptance of those rates, and reiterate your most important reasons that your practice deserves an increase.
I've found that staying data-driven and factual has the most impact on increasing rates as a group practice. Insurance companies don’t typically make rate increases based on emotionally-driven letters. When the data shows their faults, that’s what increases your likelihood of seeing an increase. Set yourself a schedule to request another increase every year. I look at my insurance rates as a long-haul game. I’ve been able to get all of the insurance panels I am in network with to be near my full rate by requesting those increases each year and having a solid request letter.
So, go ask for that increase if you haven’t already. And feel free to download my fee schedule increase request letter template at The Group Practice Exchange.
