Physician Practice Negotiations with Health Insurers

Abstract

American free enterprise drives the healthcare market. Private practice medical offices work in conjunction with health insurance companies to create negotiated terms on pricing for diagnostic studies, laboratory tests, and procedures in providing optimum patient care. These annual negotiations create a potential for uncertainty, and either party may decide to forego future coverage of patients if certain conditions are not met. Insurance companies typically are concerned about physicians they identify as expensive utilizers for underserved patients, while physicians are disconcerted about poor reimbursement rates or denials for patient services. The physician is markedly aware of this delicate equilibrium and proceeds with caution before establishing a diverse portfolio of contractual agreements.