Negotiating with Out-of-Network Repricing Entities: Dos, Don’ts, and Scripts

Renegotiating payer contracts ranked among the top five reasons physicians achieved financial improvement in 2022. This statistic reveals something important about today's healthcare reimbursement environment.

Independent healthcare practices encounter substantial obstacles when negotiating contracts with health insurance companies. Insurance payer contracts function as essential financial agreements between providers and insurance companies, establishing reimbursement rates and covered services. A growing number of insurers now employ third-party "repricing" entities that can significantly reduce payments for out-of-network care.

Repricing companies utilize agreements with over 1.2 million professionals and 6,500 facilities to secure discounted rates as payment in full. This approach frequently creates unexpected payment reductions for your services and increased costs for your patients. Providers retain the right to reject lower fees for services, yet many accept reduced payments when contacted.

The No Surprise Act, enacted in December 2020, has added complexity to healthcare payer contract negotiations. Healthcare professionals now need effective strategies for negotiating provider insurance contracts and understanding insurance contract negotiation dynamics.

This article examines the dos and don'ts of handling repricing entities, offers ready-to-use scripts, and provides practical guidance on negotiating reimbursement rates with insurance companies to safeguard your practice's financial health.

When a Repricing Entity Contacts You

Repricing entities function as intermediaries within the healthcare billing ecosystem. You may first receive notification that your out-of-network claim has been referred to a third-party service. These companies contact providers after claim submission to insurers, seeking to negotiate reduced reimbursement rates.

What to Expect (letters, phone calls, emails)

Repricing entities employ three primary communication methods when contacting you:

1. Phone calls - Representatives make direct calls, promoting immediate agreement to their proposed rates
2. Letters - Formal correspondence detailing their offer and requesting your acceptance
3. Emails - Digital communications that may contain attachments with proposed terms

These entities operate on behalf of major insurers to provide repricing services for out-of-network claims, frequently undervaluing physical therapy services. Their objective centers on reducing payer costs rather than ensuring fair compensation for your services.

Communications typically present a proposed payment amount substantially below your billed rate, accompanied by pressure for quick acceptance. They may frame this as a "take it or leave it" proposition, indicating patients will face higher costs otherwise.

Importance of Not Agreeing Verbally

Verbal agreements create significant complications in business settings. While verbal contracts can technically be legally binding, they present substantial challenges when disputes arise later. The primary difficulty with verbal agreements lies not in their legality but in proving their terms and existence.

Avoid making verbal commitments to repricing entities for this reason. Memories fade over time, subjecting verbal agreement terms to protracted litigation as parties dispute conflicting interpretations. Verbal negotiations rarely occur with witnesses present who could later verify what was agreed upon.

Accepting discounted rates verbally may legally bind you to unfavorable terms while providing limited recourse if the repricing entity fails to fulfill their agreement. Verbal negotiation practices often result in significant underpayments to providers and unexpected out-of-pocket costs for patients.

The Dos

Effective negotiation with repricing entities demands preparation and clear boundaries. These best practices protect your practice financially during healthcare payer contract negotiations.

Ask for All Offers in Writing (email preferred)

The fundamental rule when dealing with repricing entities: what is not written does not exist. Require written offers rather than verbal agreements. Email creates an automatic timestamp and digital record.

Written agreements protect both parties from misunderstandings and disputes that commonly arise from verbal-only negotiations. When invited to reprice, treat it as a completely new contract offer, requiring formal written acceptance.

Keep a Detailed Paper Trail

Documentation serves as your protection. Record all activities related to the negotiation process, ensuring all negotiated elements are captured. This documentation should include:

• Correspondence with repricing entities
• Proposed and countered rates
• Timeframes for decisions
• Any special terms or conditions

Establish a consistent record-keeping process and maintain a repository of all negotiation documents. This practice proves invaluable if disputes arise later.

Request a Case/Reference Number

Obtain a specific case or reference number for each negotiation. This number ensures your negotiation is properly tracked in their system and provides critical reference points for follow-up communications.

Case numbers allow you to quickly reference specific claims when communicating with repricing entities or the original payer, streamlining resolution processes.

Be Clear on Your Terms and Boundaries

Thorough preparation is essential before entering negotiations. Analyze existing contracts, set clear goals, and develop a strategy. Communicate all points and demands precisely - ambiguities lead to misunderstandings and subsequent conflicts.

Once an agreement is reached, review it with appropriate internal stakeholders. Ensure all changes are accurately reflected in the final document and clearly communicate the changes to your billing team.

The Don'ts

Repricing entity negotiations require clear boundaries. Certain practices can damage your practice's financial health regardless of your positive negotiation strategies.

Don't sign blanket agreements

Blanket agreements with repricing entities create financial traps across multiple claims or insurance companies. These contracts frequently include hidden clauses extending beyond the current claim, establishing ongoing financial commitments. Negotiate each claim individually to protect your reimbursement potential.

Don't accept verbal deals

Verbal promises rarely translate into actual payments. Written documentation provides your only recourse when promised amounts differ from received payments. Always require written confirmation before proceeding with agreements.

Don't sign blanket repricing agreements

These agreements authorize repricing entities to apply discounted rates across all claims with specific payers—or multiple payers simultaneously. Such arrangements reduce your practice's revenue over time, potentially affecting your ability to provide quality patient care.

Don't act under pressure—take time to review

Repricing entities frequently create artificial urgency around their offers. You maintain the right to thoroughly review proposals. Take adequate time to understand terms, consult with colleagues or legal advisors when needed, and base decisions on what benefits your practice.

Sample Scripts

Scripts provide consistency when responding to repricing entities. These templates help you maintain professional boundaries while protecting your practice's financial interests.

Declining to negotiate: "I do not accept the proposed rate and request this claim be sent back to the payer for processing at standard OON rates."

This response establishes your position clearly. The script directs the repricing entity to return the claim to the original payer, preventing them from denying your request without proper action.

Request for written terms: "Please provide your offer in writing by email. I will review and reply in writing."

This script enforces documentation requirements. It creates a paper trail while providing time to evaluate offers properly. This approach prevents misunderstandings from verbal-only negotiations.

Rejection email template

Dear [Representative Name],

Thank you for your proposal regarding claim #[number] for patient [initials only].

After careful consideration, I must decline your offer of [proposed amount]. I cannot accept this rate, as it does not adequately reflect the value of services provided.

Please return this claim to the payer for processing at standard out-of-network rates.

I appreciate your understanding in this matter.

Sincerely,
[Your Name]
[Practice Name]

What If They Refuse?

Negotiation efforts sometimes reach an impasse. When repricing entities refuse your terms, you face important decisions about your practice's financial future.

Next steps with the payer

After a repricing entity refuses your counteroffer, you essentially face two primary options: accept their current reimbursement structure or terminate your relationship with that plan [191]. Before making this decision, consider completing negotiations with other payers first. Success with different insurers may provide leverage to reopen discussions with uncooperative plans [191].

Evaluate whether the patient share covered by the problematic plan will significantly impact your practice. If patients with better insurance struggle to get appointments with you, dropping a poor payer may have minimal financial consequences [191]. Nevertheless, if that carrier covers 15% or more of your patient panel, this decision requires careful consideration [191].

For smaller practices with limited negotiating power, alternative approaches include:

• Pursuing value-based rewards (1% above fee schedule for using electronic records)
• Watching for new base contracts that might offer better terms
• Building patient loyalty to strengthen your position [193]

Seeking assistance from APTA/Legal

Physical therapists practice under healthcare laws and regulations requiring compliance [201]. APTA cannot provide legal advice, guidance, or referrals to specific attorneys [201]. They lack investigatory resources to examine legal or ethical issues [201].

For assistance with contract negotiation challenges, seek advice from legal counsel who can review your unique situation and provide tailored guidance [202]. This professional support becomes especially valuable when considering major changes like going out-of-network.

Summary & Documentation

Healthcare providers face substantial challenges when dealing with out-of-network repricing entities. This article has outlined essential steps to protect your practice's financial health while maintaining quality patient care. Documentation remains your strongest defense when handling these third-party entities.

Successful negotiations depend on clear boundaries and consistent procedures. Insist on written offers, maintain detailed records, request reference numbers, and resist pressure tactics. Avoiding blanket agreements prevents long-term financial damage that could impact your ability to serve patients effectively.

The sample scripts provided serve as practical tools for responding professionally yet firmly when repricing entities contact you. These templates establish consistency in your communication strategy while creating essential documentation for future reference.

When negotiations fail, you face important decisions about continuing relationships with certain payers. Consider the percentage of your patient panel covered by problematic plans before making significant changes. Smaller practices might pursue value-based rewards or build stronger patient loyalty as alternative approaches.

Healthcare reimbursement continues to evolve since the No Surprise Act passed in 2020. Providers who understand negotiation dynamics and implement strategic approaches can navigate these challenges successfully. Following the guidelines outlined here positions you to receive fair compensation for your services while protecting your patients from unexpected costs.

What isn't written doesn't exist in healthcare contracting. Your diligence in documentation today prevents financial complications tomorrow.

Key Takeaways

When dealing with out-of-network repricing entities, protecting your practice requires strategic communication and meticulous documentation to avoid financial pitfalls.

• Always demand written offers via email and never accept verbal agreements—what isn't documented doesn't exist in healthcare contracting disputes.

• Avoid signing blanket repricing agreements that automatically apply discounted rates across multiple claims or insurance companies.

• Use professional scripts to decline negotiations: "I do not accept the proposed rate and request this claim be sent back to the payer for processing at standard OON rates."

• Maintain detailed paper trails with case numbers for all correspondence to protect yourself in future disputes or negotiations.

• Take time to review all proposals without pressure—you have the right to thoroughly evaluate terms before making decisions that impact your practice's revenue.

Remember that repricing entities work to reduce payer costs, not ensure fair provider compensation. By following these guidelines and maintaining firm boundaries, you can navigate these negotiations while preserving your practice's financial health and continuing to provide quality patient care.

FAQs

Q1. What are out-of-network repricing entities and why do they contact healthcare providers?

Out-of-network repricing entities are third-party companies hired by insurance companies to negotiate lower reimbursement rates for out-of-network care. They contact healthcare providers after a claim has been submitted to an insurer, attempting to reduce the payment amount for services rendered.

Q2. How should healthcare providers respond when contacted by a repricing entity?

Healthcare providers should always request offers in writing, preferably via email. They should avoid making verbal agreements, keep detailed records of all communications, and request a specific case or reference number for each negotiation.

Q3. What are some key things to avoid when dealing with repricing entities?

Providers should avoid signing blanket agreements that apply discounted rates across multiple claims, accepting verbal deals without written confirmation, and acting under pressure without taking time to review offers thoroughly.

Q4. Are there any ready-to-use scripts for responding to repricing entities?

Yes, providers can use scripts like "I do not accept the proposed rate and request this claim be sent back to the payer for processing at standard OON rates" or "Please provide your offer in writing by email. I will review and reply in writing."

Q5. What options do providers have if negotiations with repricing entities fail?

If negotiations fail, providers can consider accepting the current reimbursement structure or terminating their relationship with that insurance plan. They may also explore alternative approaches such as pursuing value-based rewards or building stronger patient loyalty. Seeking legal counsel for guidance on contract negotiations is also an option.

‍