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Doctors don’t go to medical school to study business. Anesthesiologists, like all doctors, want to focus their professional lives on taking care of patients. Business considerations are still a secondary concern, yet many practice leaders remain unfamiliar with some of the crucial terms within their existing contracts—as well as their effects on the practice.

When it comes to contract negotiations, it’s important that your agreements reflect market-value rates. That can be a complex topic, though, due to the many regional and specialty factors involved, along with other variables such as case volume or number of locations covered.

What to bring to the table

Even practices that understand their contracts well seldom know everything to prepare before sitting down. The key to success is details, details, details.

To be at the table, practices should be armed with information that not only focuses on strategic numbers, but intrinsic value as well. Practice should take into consideration items such as:

  • Current market information regarding ranges acceptable to hospitals/health systems and payers
  • State regulations
  • Payer policies and procedures
  • Fair market value by geographic region
  • Specialized services (e.g., OB, pediatrics, teaching hospitals, etc.)
  • Location (multiple sites or exclusivity to an area)
  • Volume
  • Length of time in practice

Whom to bring to the table

Preparation can be complex, so a skilled partner in anesthesia contract negotiations can help you obtain the right data. The right partner will be highly knowledgeable regarding such issues as: current market-value rates; potential bonuses (for impact on quality measures and rescheduling reduction, for example); current state payment regulations; and payers’ policies and procedures. They should also be intimately familiar with the practice’s contract details.

When performed properly, this service can more than pay for itself in financial outcomes on behalf of the practice.

What’s on the menu

It’s also important to look at long-term relationships during the negotiation process. The goal is to drive negotiations favorably toward the practice without unfavorably affecting payer or hospital/health system relationships. One example might be to put rate accelerators in place for a number of years, removing the need for frequent rate renegotiations. That way, they’ll be baked into payer and hospital/health system budgets and remove the need to renegotiate contracts annually.

Leave the table satisfied

Contracts negotiated without the full consideration of all data can easily leave 10 to 20 percent of deserved revenue on the table.

If you’re interested in closing the gap between your current contract and the contract you could operate under, abeo can help. We operate a highly skilled contract consulting department with a proven track record of results on behalf of its anesthesia clients. To learn more contact our team or call us at 888.281.6187.



abeo Management Corporation (abeo) serves as a leading source of revenue cycle management and practice management with a specialization in anesthesia. The company leverages its people, processes, and software to serve independent practices, surgery centers, hospitals and healthcare systems with a scope of services that include billing, coding, transcription, practice management, and business consulting.

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