This week, on LinkedIn’s Managed Care Contracting Group, I responded to a new discussion post from a HME provider that seeking a managed care contracting consultant to help them get coveted contracts with key payers in the community. Here was my response:

Phase One: Researching the Market for the Purpose of Building a Competitive Go-to-Market Strategy

The first thing you must do is hire the managed care consultant that can help build a strategy.  Building the strategy doesn’t come in template form. It is the result of having performed market research properly. The consultant, or client, or another researcher must first perform the necessary market research to determine the following:
a) what is each payers’ strategy for the market(s) in which you operate b) do they have exclusive supplier deals in place such that they cannot extend an invitation to you (bona fide barriers to entry) c) if no exclusive deals are in place, what are the criteria for a new panel entrant (where are their needs, gaps in supplies, weaknesses that you can fill, etc.,) d) if there are any “Any Willing Provider” laws on the books that are not being followed properly, etc.

The list actually goes on, but what is included in the list is actually derived from a client interview, and is also not boilerplate.  For me toinclude an exhaustive checklist here might be accurate or irrelevant depending on the circumstances.

Phase Two: Building the Strategy and Business Rules

The next phase of the project is to make strategic decisions from the data gathered, to determine next steps. As a part of this phase, the consultant should produce a set of model corporate contracting standards or “business rules” that aligns with your back end business process so that the terms and conditions are practicable- not just a source of additional problems for your revenue cycle side of the house.  These must be reviewed and implemented.

Phase Three: Contract Analysis, Clarifications, Payer Due Diligence, and Negotiation Plan

This formalized strategy and business rules gives the consultant “rails” by which to analyze the contract drafts,(assuming that contract offers can be obtained — otherwise the project to land that particular contract is ended) and guides the pushback and revision language without constantly burning more hours on the clock going over each proposed revision. (A leaner approach to consulting.)

This sets up the next step in this phase, which is a summary of findings on the analysis of each contract, and one document is produced that suggests all revisions for your approval. If there are any pre-negotiation clarifications to be obtained from the payer (or further market research / due diligence), that happens before the summary is prepared. This summary concludes the second phase with a “go/no go” decision.

This part is usually the longest phase.  Hours here all depend on how long and how clear the contract draft supplied by the payer is, the nature of clarifications required, the turnaround time, the price modeling,  For an HME contract, I would have the client do the price modeling on the contract because of the number and nature of the items on the list. The price modeling should include the development of a contract specific line item database entry to ensure payment compliance once the contract is executed and goes “live”.

Phase Four: Negotiation

If the decision is made to move forward, the third phase — negotiation, begins.  Here, either you negotiate with the payer or the consultant does the negotiation, or the consultant “coaches” you from the shadows. Your strategy and business rules would be relied upon here for the deal-breaker and walk-away points so that you negotiate from a position of fact and business strategy instead of capitulation on a bad deal out of pressure or emotion.


You can now see the work flow that must occur to achieve the objectives for this project- if they can be achieved. It is not a small project, and each contract you want to win will have a similar work flow.  The one thing that will be redundant in this (paid for only once and reused) will be the development of the contracting strategy and business rules.  As for business risk, there are no guarantees that at the end of this a contract will be executed, either.  At least, you can see how the tranche segments work for the pricing of such a project. I shared this with the poster on LinkedIn so that he won’t form expectations that this can be done for a “project price” (Well it could, but now, perhaps you see why it shouldn’t.) Depending on the time he has available to do some of these things, his inclination, and his budget, parts of this can be assigned to the consultant or done by him or someone employed full time by the HME Company.
If you are in a similar situation, Mercury Advisory Group would be pleased to engage in this project with you. Call me if we can be of assistance. Or schedule a complimentary 15-minute consult at to discuss it further.

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