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Managed Care Contracting 101

Building Your Contracting Business Plan

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The Business Plan

Conduct internal assessment– Begin assessment at least 8

months prior to contract end/renewal date

– Review historical business volume among various payer or provider clients

– Evaluate current contract performance gaps

– Solicit internal stakeholder input

– Establish desired objectives under new contract

– Have financial team prepare pro-forma with future performance goals

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The Business Plan Continued

Assess current external business environment

– Inventory competitors, market share, best practices, short-comings

– Make best estimate of provider/payer business conditions

– Review governmental and regulatory conditions, current and projected

– Determine implications for your business

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The Business Plan Continued

Prepare a contracting calendar

– Prioritize projects by business volume/need for new contract

– Establish timeline for negotiations

– Set start date, milestones and end date

– Communicate timeline with internal stakeholders

– Record and communicate progress, barriers, action plans and resolution steps

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The Business Plan Continued

Contract negotiations process

– Conduct up kick-off meeting with client

– Share performance outcomes and objectives under new contract terms among parties

– Come prepared with business volume metrics

– Schedule follow-up meetings/feedback frequency

– Meet timelines for all parties and address issues promptly

– Ensure contract terms can be administered by all parties

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The Business Plan Continued

Post Negotiation Steps– Communicate results with internal stakeholders– Conduct informational meetings/distribute

communication vehicle across organization– Develop contract performance monitoring process

Set up database retrieval format for monitoring Evaluate performance at least quarterly Investigate gaps between actual and desired

performance; make corrections as necessary

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The Business Plan

Important Tips! – Treat parties as business

associates not adversaries– Start negotiations early and

communicate often– Hold periodic meetings with

client to ascertain issues and maintain favorable relationship

– Keep diary of meetings, follow-up actions and commitments

– Make sure contract terms can be administered