All right, everyone. We are back here to talk all about requesting rate increases from insurance panels. Do you know you can do that? You can do it. That’s a thing. I’m going to talk all about it today. So, stay tuned if you are interested at all in raising those insurance rates.
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Okay. On to our discussion about requesting rate increases with insurance panels.
Okay, everyone. I am back here. We’re talking all about requesting rate increases from the insurance panels. This is going to be a relatively short and sweet episode. I’m just going to jump right to it, tell you how to do it, and then let you go do it.
The first thing just to put out there right off the bat is that, yes, you can request rate increases from insurance panels. I’ve run into so many folks in my coaching practice and around the testing world [00:02:00] who were not aware of this. So, first of all, you can do it. You’re not locked into those rates and just at the mercy of the insurance companies deciding whenever they might want to raise your rates, which may not be that frequently. We are paneled with one insurance company that has not raised rates in about 8 years. So, that’s not something you can sit around and wait for. You got to take it into your own hands and try to make those increases happen yourself.
Okay. So, when do you want to ask for raises from the insurance panel? You basically want to do this regularly throughout your practice starting from the very beginning when you sign that contract with the insurance panel.
Now, two episodes ago, in episode 144, I just talked about credentialing with insurance panels and how you sign a contract. It’s a legally binding document. As part of that contract, they’re going to send you a fee schedule. That is something you do not want to [00:03:00] overlook.
So, the fee schedule is going to tell you exactly what they will reimburse for each CPT code. If those rates don’t look competitive enough for you, don’t sign that contract until you go back and try to negotiate. I’ve had this process work, the negotiating right off the bat process, I would say at least 30% of the time where the insurance panel will come back and say, “Okay, yes, we can raise those rates.” And they’ll amend the fee schedule and send you a new contract to make sure that those are set in stone.
Something else you can do that is a happy medium if they come back and say, “No, we won’t increase your rates for all of those CPT codes”, you can just ask for an increase on your 90791 CPT code, which is your intake and the testing codes. And you can make the case that testing is a specialty and [00:04:00] there aren’t many people that take insurance. That suggests that you have an area of specialty that is worth compensating a little higher. So, you definitely want to request the rate increase right off the bat, first thing. And if they don’t do it, that’s fine too, but you have to ask.
Now, subsequent rate increase requests should happen at least once a year. So, this is something in our practice that I just set aside a 2 to 3-hour block about once a year. You can put a reminder on your calendar and you can just make sure that you have your letter template, which I will talk about and you send those templates in to request your rate increases. You may not get an increase every year. That’s fine. You’d likely won’t, but you have to ask, I would say at least once a year.[00:05:00] Okay. So, how do you do this? I mentioned a letter template. That’s what I use. I got my letter template from Maureen Werrbach at The Group Practice Exchange. There are I think a number of templates out there, but I will link to her template in the show notes so you can check that out. But basically, you’re going to create a document that… or actually, let me back up. Sometimes we don’t have to overthink this. If you have a good relationship with your provider rep and they’re easy to reach, you can give them a phone call and request a rate increase over the phone. And that will sometimes work. So, definitely go that route first. And then if it doesn’t work, then you can go for the letter template which is much more formal.
So on this letter template, you’re going to have a number of items. Here is what’s going to be [00:06:00] on that letter template. So the main thing is that you want to open and basically say, “We’ve been paneled for X number of years. We have not received a rate increase in X amount of time, and here’s why we feel like we deserve one.” And then that you can talk about your practice specialties. For testing practices, this is relatively easy because testing is a pretty clear specialty. And there usually aren’t a lot of folks who take insurance and do testing. So, you can make a pretty compelling case that testing is a specialty that deserves an increase.
Other things you might highlight are evening hours, weekend hours, bilingual clinicians, anything like that. And you can put that information in there and list them as specialties.
In some cases, I’ve had to go the extra mile and I’ve done some calculating [00:07:00] of numbers based on the population in our town and the number of psychologists I could find who take that insurance and do testing, and then do a little bit of math and break it down and put that in the letter to say, “Hey, look, there’s basically one psychologist for every 15,000 children here to provide the service. We are in very high demand. To stay on the panel, we’re going to need an increase to be able to continue to serve the community.” So, you can create some of those numbers to present a little bit more compelling case as to why you should be compensated at a higher rate.
Once you present that information, your specialties, and why you “deserve an increase,” then what I’d like to do is say, “Here’s our private pay rate for each [00:08:00] of these CPT codes.” And then I’ll list each of the private pay rates. Why do you do this? You do this because you are creating a little bit of dissonance between the private pay rate and what most insurance panels are reimbursing, of course, with the intent of decreasing the gap between those two.
So next, you want to list your rates with that insurance panel according to each CPT code. So again, just mapping out the dissonance between the full fee rate and their CPT code. Then I list the same CPT code and the range that I’m receiving from other insurance panels. So, I always list the panels that are paying higher than the panel that I’m requesting the raise from. That again just helps create this picture that whatever panel you’re requesting a [00:09:00] raise from is underpaying you.
Okay, so you’ve got those three components. You list your out-of-pocket rate per CPT code, the rate that the insurance panel that you’re requesting a raise from pays, and then the rates that you’re getting paid from other insurance panels for the same CPT codes. After that, you say, kind of a summary statement, like, “As you can see, the rates from your panel are not up to par with market rate and other insurance panels. Here’s what I’m requesting.” Then you list the CPT codes and list the amount that you are requesting.
I try to keep this reasonable. You don’t want to request an increase of like 50% every year. That’s not realistic. I would say at least request a 10% increase each year. You may not get it, but they [00:10:00] may give you a 5% increase, which is fine.
The last thing then is to list again, what rates you’re requesting that they jump up to. And again, this is another place where you might request a higher rate of reimbursement for testing services. And if you don’t do much therapy, you can leave therapy where it is, or maybe just request a smaller increase.
And then finally, you want to say, “We currently see X number of patients with this insurance panel or X insurance panel makes up a certain percentage of our client base” just to present a compelling case that you’re seeing a lot of these clients and you’re providing a service to the panel that is very valuable.
And then, the last component is that you just want to give them basically a deadline to respond by so you’re not just hanging out and waiting.
So [00:11:00] that’s my method. You take that letter and then you either, hopefully, you can just email that to your provider rep, but sometimes you may need to fax it in or even mail it in at some point points. And that’s just completely cumbersome, but that’s how it goes.
All right. So that’s the information that you need. That’s how you do it.
Now, what happens if you don’t get the rate increase? Well, that’s up to you. So you may say to yourself, and there are a lot of variables here, so it depends on your current rate of reimbursement with that panel and whether you can sustain that, and if you want to stay with the panel. It may depend on the last time that they gave you a raise. So, if you got a raise from them last year, maybe don’t expect it this year and just hang out for a bit. But the short story is, if you don’t get the raise this time, try again.
And for me, the formula is, if they haven’t given us a raise in a year or two, then [00:12:00] I will circle back around and ask again in six months. But if they have given us a raise within the last year, then I’ll generally just wait another year. You can also come back and try to negotiate a little bit and say, “I totally understand. I know finances are a priority at your insurance panel. What if we raise it just a bit?” And then you backtrack a bit and lower your request.
And if that doesn’t work, then you get to do kind of a cost-benefit analysis and figure out if it is worth it to continue taking that panel. So, you consider how many of those clients you are seeing and how much of a hit that might be to your practice to drop the panel. And if they haven’t given you a raise in a number of years and you don’t see a path forward with that, then I would not be afraid to write [00:13:00] and say, “We haven’t received a raise in X amount of time. I feel like I have made reasonable requests for increases. And if we cannot get an increase by X date, we will leave this panel.” And up the ante a little bit with those insurance panels to see if they’ll respond.
So, it is doable, like I said. And just over the course of our practice, I’ve gotten several raises over the years. And it varies. I mean, I’ve gotten 50% raises and I’ve gotten 15% raises, but they do happen and they happen more frequently than you might think. So if this is not on your radar, it definitely needs to be on your radar. I can’t think of any other job or situation where you would just work indefinitely without asking for a raise. So, you can think of it that way that [00:14:00] this is just part of your job to try to get raises from insurance panels.
I certainly am no expert on the economics of insurance panels and the financial workings of those panels, but it certainly seems like profits are increasing. So, you have maybe some ground to stand on when you ask for reimbursement and parody for the rates that you’re being paid.
All right. Like I said, quick and dirty episode on requesting raises from insurance panels. This concludes our insurance mini-series. If you enjoyed it, I’d love to hear some feedback. If you want more on the insurance, I would love to hear that feedback as well. Happy to put together another mini-series. You can reach me at firstname.lastname@example.org.
And again, if you have not subscribed to the podcast, I would love for you to do that. I’d be honored if you did that. You can do that in iTunes by hitting [00:15:00] subscribe or hitting follow in Spotify. And other podcast mediums I’m sure have an easy way to do it as well.
All right, y’all. So at the time of this recording or rather at the time of this release, whenever this airs, I will be in California for one of my bi-annual practice retreats. If you are not aware of how to do a practice retreat, I did an episode just a few episodes ago on doing a practice retreat to supercharge your practice. So, you may go check that out. I hopefully am getting a lot done and doing some big visioning and solving some of those problems that have been existing in our practice for a while, and coming up with some new ideas for the podcast.
So, yeah, I hope that you are all doing well, hanging in there, and I look forward to talking to you next week.[00:16:00] The information contained in this podcast and on The Testing Psychologists website are intended for informational and educational purposes only. Nothing in this podcast or on the website is intended to be a substitute for professional, psychological, psychiatric, or medical advice, diagnosis, or treatment. Please note that no doctor-patient relationship is formed here. And similarly, no supervisory or consultative relationship is formed between the host or guests of this podcast and listeners of this podcast. If you need the qualified advice of any mental health practitioner or medical provider, please [00:17:00] seek one in your area. Similarly, if you need supervision on clinical matters, please find a supervisor with an expertise that fits your needs.