Key Takeaways | Understanding the Basics of Payor Contracting

Payor contracting can seem daunting, particularly for new companies and innovative organizations that are unfamiliar with the nuances of providing a product to health insurers and health maintenance organizations. Navigating regulatory considerations and payor contract complexities requires a solid understanding of the basics.

During this webinar, McDermott Partners Gregory Mitchell, Mimi Alexandre, and Erin Kelly discussed some key principles of payor contracting.

Top takeaways included:

1. Understand the applicable legal requirements. Different types of payors are subject to different legal requirements. For instance, commercial payors are regulated by state insurance and health maintenance organization laws, and Medicare Advantage payors are regulated by federal law.
2. Consider hybrid contracting. Providers and vendors generally use different contracting paper. Businesses that do not fit neatly into either category may use key provisions from both paper types to create a bespoke contract template.
3. Be prepared to negotiate well before services launch. Medicare Advantage plans file bids approximately six months before the new plan year. Because these plans may negotiate provider and vendor terms before filing bids, contracting parties should tailor their contracting strategy accordingly.