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Contracting: Offer best value proposition

Contracting: Offer best value proposition Q. How can I get contracted into closed and narrow networks?

A. It is often challenging for HME companies to get contracted with payers. Payers often close their networks to new provider applications once they reach a certain number of HME companies. 

There are two similar scenarios: a closed network and a narrow network. When a network is closed, the payer has established a business practice that it is not accepting more providers into an existing network. In a narrow network, the payer has determined that it is generally not accepting more providers since its network currently has the optimal number of providers. The narrow network often provides a more likely pathway for a new provider to get into the network with a unique value proposition.

While there is no “silver bullet,” a great approach to getting into a network is to couple a pricing advantage with a unique value proposition. Such differentiators may be based on product(s) feature(s), service(s), and treatment benefits.

The best value propositions result in clear savings and treatment benefits. For example, a monitoring device that enables patients to avoid in-patient stays in hospitals while awaiting a transplant. Or, a device that includes the services of a therapist who ensures the proper fit and compliance thus ensuring the right treatment outcomes.  

State the benefits of the device from the payer's perspective. That is, does the device reduce hospital in-patient stay days, improve treatment compared to alternatives, and, most importantly, will the device help the payer to meet its objectives?

Make sure that you follow a disciplined contract negotiation strategy, built around proposal preparation, then negotiation and, finally, monitoring payments is key.

Steve Selbst is CEO/co-owner, Healthcents Inc. Reach him at [email protected]


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