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Advantages of Smaller Physician Practice

March 7, 2019

SMall-Physician-PracticeBig isn’t necessarily better, especially when it comes to delivering quality patient care. Researchers have found that smaller practices delivering more personalized patient care, had lower rates of preventable hospital admissions, possibly due to the fact that patients often have an easier time booking an appointment with a smaller practice, as well as better physician-patient relationships. These in turn may lead to keeping patients healthier by detecting potential conditions before they result in a hospital admission.

The study, entitled “Small Primary Care Physician Practices Have Low Rates of Preventable Hospital Admissions” showed that practices consisting on 1 or 2 physicians had 33 percent fewer preventable hospital admissions when compared to practices with those with 10 to 19 physicians. Practices with 3 to 9 physicians had 27 percent fewer admissions. These findings challenge the assumptions that larger practices, with their more extensive resources, offer patients better care.

What Are Smaller Practices Doing Right?

Some of the reasons for the lower admissions rates include ease of setting appointments for visits resulting in seeing a provider sooner rather than having to wait days or even weeks and thus preventing small problems from becoming worse. Other reasons may have to do with better physician-patient relationships: patients that have better access to care tend to be seen more frequently as need dictates. Physicians in smaller practices have an easier time tracking and monitoring their patients’ progress to the benefit of everyone.

These findings may help smaller practices, which traditionally have been at a disadvantage when negotiating payment contracts with payers, more muscle to flex at the bargaining table. For example, fewer preventable admissions mean less payout for insurers, so anything that saves them money is bound to find favor come negotiation time.

Talking Points for Smaller Practices

You have more “bargaining muscle” than you may think here are several points from Penny Noyes, president and CEO of the Bowling Green, KY firm of Health Business Navigators to consider when preparing to negotiate with a payer:

  • If you keep extended hours, you should be able to show that by offering patients extended appointment hours you may be keeping them from making more expensive emergency room visits. Payers are always happy to see quality indicators such as fewer episodes of preventable hospitalizations and other proof of better controlled care.
  • Being the “only show in town” or just one of a handful of specialties in your immediate area will give you more clout with your payers. Since quality primary care is of major importance to payers, the fact that few markets in your area are filled with primary care doctors will count heavily in your favor.
  • Payers will often show preference to those practices offering one main procedure, or offering a subspecialty, such as treating asthma or other types of specialized services that can’t be easily obtained elsewhere by your patients.
  • If your patients are happy to show you some love, let the world (including payers) know. Testimonials from patients and employees alike as well as positive survey results can all help boost your practice’s standing among your payers. While insurers and others want to save money with low pricing they also want to see satisfied customers
  • Additionally, if you’ve earned accreditation from organizations such as the Agency for Healthcare Research and Quality (AHRQ) or the National Committee for Quality Assurance (NCQA), by all means, let payers know. According to commercial insurance strategist Brennan Cantrell, the ability of small practices to show quality metrics is extremely important with insurers and has a positive influence on future contract negotiations.

Hit the Ball into the Payer’s Court

Finally, don’t be afraid to play a bit of hardball: Health Business Navigators’ CEO Noyes recommends starting with a friendly request to the payer at least five or six months ahead of the contract renewal date, ask for the changes you wish to see implemented. While you will likely be ignored, don’t give up.

After reviewing the termination as well as term time frame sections of your agreement, send a formal notice explaining that you have tried on good faith to negotiate but haven’t received a response.  Later, add something to the effect that “While my main purpose is negotiation, if your company is unable to provide the requested rate improvement, please accept this as my notice of termination.”

Remember that most agreements require at least 90 to 12 days’ notice, so be sure that your notice meets these timeframes.

Noyes recommends letting the payer know that you will also be sending notices to your patients informing them that as of the specified date you’ll no longer be in that network. This will demonstrate your concern for your patients as well as that you are serious about leaving in the absence of a satisfactory rate change. Also take note of open enrollment dates for any plans including Medicaid replacement or Medicare Advantage.

Since most payers have no desire to lose primary care providers around the same time as patients having to choose their coming year’s healthcare plans, you should be in a much better position to negotiate more favorable rates and other terms.

Working with an Experienced Medical Billing Company

For many smaller primary care practices, with a small staff to match, trying to keep up with constantly changing payer requirements, claim denials, follow-up and revenue collections can be one of the down sides of being a solo or small organization.

While doing more with less is a fact of life for most of you providers with smaller practices, it doesn’t have to mean your office has to go it alone. Since 2002 We have been helping practices of all sizes and specialties with their medical claims billing, follow-up and other means of revenue capture as well as offering add-on services and expert guidance.

Contact me at 770-666-0470 or email to learn more about how we can help your practice comply with the latest regulatory updates while improving your revenue cycle.


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