Contracting: Find another way in

Q. How do I get access to private insurance contracts when the network is closed?
Friday, March 22, 2013

A. The insurance carrier will accept your application with the explanation that the network is currently closed until its annual review; however, during the annual review process, you receive a rejection letter stating the carrier has its allotted providers for the new year.  Hence, you are “locked-out” of the market.  

There are several options:

• Contract with a local provider or a network that is already contracted with the carrier you want to service. You take the order, deliver the product and submit the paperwork to the billing provider. The contracted provider bills the order; collects the cash and cuts a check for the agreed contracted split. Typical cycle process is 60-90 days. You could have access to one or more contracts depending on the agreement. The contract rates are typically 40-50% below current Medicare rates. Typically your cost is a percentage per claim with no cap on your expense.

• Alternatively, join a network that charges an annual fee. As a provider, your company name and NPI number are entered into the network. As the provider, you market the product, take the order, deliver the product, and handle the billing. Terms are a net 30-45 days. The negotiated contract rate is typically 25% higher than Medicare rates (sometimes even greater). In this scenario, one or two good clients will pay the fixed-cost annual fee and there are no additional charges.     

Other organizations offer similar membership programs tied to multiple business matrixes. Those matrix requirements could be difficult to achieve if you are a small provider. Be clear about what you want and ensure that you obtain a contract for the agreed process. HME

Martha Bowers is a business consultant and owner of The Bowers Group.  She can be reached at 714-470-3541 or