Tips you can follow for successful contracting

Don’t assume that because you are participating in every managed care program in your market, you are guaranteed a steady, profitable stream of patients. In fact, one of the more important parts of any manager’s jobs is to continually review those contracts to see if you really are making money, says Robert J. Zasa, FACMPE, principal for Woodrum/ASD, a Pasadena, CA-based firm that manages and develops ambulatory surgery centers.

Look at the patients and reimbursement for three months before contracts are due for renewal, says Zasa. "In addition to the payment timeframe, look at what you get paid for procedures, as well as the volume of business you receive from the insurer," he suggests.

Although Zasa recommends contracting with many managed care companies if you are just starting a new same-day surgery center, he also points out that it is acceptable to cancel contracts if you don’t see a financial justification to continue the relationship. If the volume is low, you might be better off canceling the contract and receiving the nonparticipation fee for those patients, he says. By evaluating the data well before the renewal date, you give yourself time to analyze the information and make your decision, he adds.

Woodrum/ASD’s programs generally cancel about one-half of the contracts over time as the programs grow and managers can see patterns that demonstrate which managed care companies provide the greatest volume or the best reimbursement, says Zasa. "In fact, our 10 freestanding surgery centers in California ceased participation in a number of contracts that we considered bad for our business, and their net revenue increased by 15%," Zasa says.