How Do I Prepare for Negotiations with Insurance Companies?

Organize a team of experts. Negotiations with insurance companies are difficult and frustrating. The burn out rate of health care negotiators is high. Being able to rely on a team approach is key. It is very difficult to set aside sufficient time for negotiations with insurance companies in your daily schedule and spend hours away from the clinic, academic institution, and/or your patients. Sharing the burden will make it easier for everyone involved to continue to contribute to the process.
four men sitting at a table on the white chairs and negotiate with each otherYour team should consist of at least three negotiators with one designated as the leader. The three physical therapists must be committed to the process and a good outcome and be willing to invest time in the negotiations. Around the core negotiating team should be numerous advisors with different backgrounds and personalities to ensure you receive diverse input and feedback.

Be careful of people who have strong uncontrolled emotions or grudges or have had previous communication or negotiating experiences with the insurance company that have generated ill will. Emotional baggage from prior encounters could prevent open communication, healthy relationships, and fruitful discussions and could doom your outcome before the negotiations have even started.

Include APTA staff as part of your advisory group. APTA staff has a world of knowledge and experience that is readily available to members.

Now that you have a negotiating team, continue your preparation. Make sure everyone is aware of the who, what, where, when, why, what ifs, how much, and why not. Set the goals and objectives for the negotiations and make sure everyone on your team can define these goals clearly and concisely. Have a general information meeting to explain the negotiating process and how it relates to the main problem, the objectives, and the goals.

Negotiation is not about being right or wrong but about finding mutual ground for a win-win solution. For example, help the insurance company improve the quality of physical therapy provided to its subscribers in return for more fair reimbursement. Or achieving direct access to physical therapy care and helping the insurance company set the boundaries to avoid over-utilization of rehabilitation services. Negotiating is not a game. It is not about egos, perception, or “getting your way.”

The next step is practicing the negotiations. Try to explore all the counterarguments that the other side will present. Have clear answers to all the questions, concerns, and arguments. Have multiple people role-play the negotiations and defend different positions.

Make sure all team members are able to clearly say what they mean and mean what they say. Everyone must be aware not only what to say but also how to say it. Communication is 7% words and 93% body language. (3) Negotiations can fail based on non-verbal communication regardless of how well you are able to verbalize your position. Simple things like shaking the hand of the people across the table and introducing yourself, maintaining eye contact, listening actively by leaning forward, nodding to show you are listening, smiling, adopting good posture, and remaining calm are skills you can practice to become a better communicator.

Other items to prepare prior to the negotiations are the meeting place, the agenda, the attendance list, and a debriefing meeting. Most meetings with insurance companies will take place on their territory, often in one of their meeting rooms with the two groups on opposite sides of the table. Make sure your lead negotiator is in the middle of your delegation and facing the person you believe is the key to success of the topic that is being discussed.

Prepare the agenda and send it at least a week in advance to the insurance company. Include a letter thanking them for their willingness to meet with you. If the other side has topics they would like to discuss, combine them with yours and create an equal number of topics from both sides. Try to control the topics being discussed, give the other side a “heads-up” about your topics so they can prepare their position, and limit the topics to a maximum of three. Too many topics will distract from your goal and allows the other side to jump to the next item before satisfactorily disposing of the previous item.

Make sure you receive the names of the people who will be attending the negotiations. Because time is crucial for physical therapists, you have to make sure the right people will be in attendance. The decision makers and people from the correct departments must be across the table to make your negotiations productive.

Don't attempt to negotiate with people unable to make a decision about your main agenda topic or people from the wrong departments. For example, when you try to improve clinical guidelines include the medical director. Don't attempt to negotiate increased reimbursement with only the clinical review nurse and legal counsel. Sometimes this situation occurs because they don't understand the problems we face as clinicians, they see the problem different than we do, or they don't have a full understanding of what physical therapists do. Unfortunately sometimes it is also part of their negotiating tactics.

It is my observation that insurance negotiators believe that PTs are easy to pacify and that we “go away” easily compared with other providers. Preparation is again crucial. Remember, too, that the other side's negotiators still are earning their salaries while you are away from your work. There often is no sense of urgency on the insurance side to come to a solution to our problem. They may be used to meetings without any measurable progress. We, on the other hand, as physical therapists. should push for the same thing we strive for in the clinic: measurable objective progress towards our goals within a set time frame.

3. 8 steps for highly effective negotiation. Letting the other person have your way. Rockhurst University Continuing Education Press; 2004.

For More Negotiating Information

  • Cohen H. You Can Negotiate Anything. New York, NY: Bantam Books; 1982.
  • Ury W. Getting Past NO. Revised edition. New York, NY: Bantam Books; 1993.
  • Mills H. The Streetsmart Negotiator: how to outfox, outmaneuver, and outlast your opponents. New York, NY: AMACOM; 2005.
  • Camp J. Start with NO: The Negotiating Tools That the Pros Don't Want You to Know. New York, NY: Crown Business; 2002.
  • Hindle T. Negotiating Skills. New York, NY: DK Publishing, Inc.; 1998.


Updated on: 03/14/16
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Negotiating with Insurance Companies: During and After the Meeting

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