It may seem like managed care contracts are something faculty members are subjected to and have little influence over, but there are a number of steps rank-and-file physicians can take to see their interests well-represented in both hospital and faculty practice plan negotiations.

Understand the contracting process. In many academic medical centers, hospitals and faculty practice plans conduct negotiations simultaneously. Multi-disciplinary committees or advisory boards with representatives from both the hospital and practice plan help guide these negotiations. Typically the committees review various utilization and cost scenarios for each potential contract to determine the circumstances under which it will be acceptable. Understanding the process at your institution and providing information and being available for this committee (and even serving on it when possible) are all essential to influencing negotiations.

Seek guidance early for new programs and services. An important consideration is that contracts may be negotiated up to one year in advance and span several years. This makes it difficult to have last-minute proposals considered. "Recognize that health plans contracting with us a year in advance are also selling to customers a year or two in advance, so new services are not necessarily embraced because they represent a cost," explains David Kraus, JD, MSPH, director of contracting at UC-San Diego Medical Center. Kraus also chairs a UC-wide contracting committee.

Generally, contracting committees survey departments about programs and services and also review extensive financial information as part of pre-negotiation planning. Therefore it pays to make the committee aware as soon as possible if you are performing new procedures or have introduced new services. "If the negotiators don't know about a specialized procedure, they won't get a good contract for it, and you'll be sucked into doing things that are not at a good rate," explains Mark DeLegge, MD, FACG, professor of medicine and section head of the nutrition and digestive disease center at the Medical University of South Carolina in Charleston.

Even before the point of negotiation, the committee can lay the groundwork for gaining coverage for new services. For example, UC prepares white papers outlining the clinical and financial efficacy of new modalities and presents them to health plan medical directors for review. In addition, committee representatives -- particularly those dealing with finance and reimbursement -- can help physicians develop plans that will get the new service off to a good start. "The quickest way to irritate a business manager is to start doing a number of non-reimbursed procedures without including them. But they can help with [various financial considerations] and can see how the new program differs from what's available and how it can be contracted for," says DeLegge.

Keep in mind that while it's to the academic medical center's advantage to have "carve-outs" or special rates for certain programs, health plans strive for simplicity in contracting and seek to limit the number of carve-outs, according to Kraus.

Maintain records. Contract committees have utilization data available but physicians separately should track their own clinical activities, including the mix of new and established patients and procedures, intensity of services, and no-show rates. "It helps [the committee] determine how many FTEs are available to see patients, but also shows clearly what you do on a day-to-day basis, which raises your value as a member," contends DeLegge.

Focus on performance, exposure. Since cutting-edge treatments in particular can be a hard sell to health plans, physicians can help their own cause by publishing outcomes and presenting them nationally and locally. "You need to show performance excellence, otherwise the faculty may not have much leverage," says Vijay Rajput, MD, FACP, program director for internal medicine residency at the Robert Wood Johnson Medical School in Camden, NJ.

Continuing education activities at the local and regional level can make the difference in getting coverage or better rates for certain services. "Once faculty do that and referrals are coming in, it can effect a change in the contract. Otherwise, we may indeed have better outcomes, but it's not something that can be recognized in a contract," reports Kraus.

Be willing to compromise. At times it may appear that a contract is more beneficial to the hospital than the practice plan, but in reality negotiators try to get the best deal for both. "Since we're an integrated organization, we have no incentive for physicians not to do well. We try to engineer contracts so that the sum of the financials for both the hospital and practice plan creates synergy," explains Kraus. Accomplishing that may require compromises. For instance, DeLegge sought coverage for three new endoscopic techniques but settled on two. "You can't go in with a win-loose posture. Compromise is always necessary, or you won't get anything," he advises.

Document and report problems. Monitoring contracts after the ink is dry is just as important as up-front planning and negotiating. If operations of one payer appear to be significantly different than others, document and report the variances to the contracting committee. "We frequently get anecdotal information," says Kraus. "Although it's useful, it's not as useful as objective data that can be used in rational decisions."