July 11, 2016
Negotiating can be difficult and overwhelming, but equipping yourself with the right tools can make a once-daunting task more pleasant and yield favorable results.
Prior to addressing the main topic of today’s alert, we felt it necessary to inform our readership of the recent proposed changes made by the Centers for Medicare and Medicaid Services (CMS) in its CY 2017 Proposed Physician Fee Schedule (PPFS). In the CY 2016 PPFS, CMS proposed reexamining the anesthesia codes reported in conjunction with colonoscopy procedures (i.e., 00740 and 00810) as potentially misvalued. In the CY 2017 PPFS, CMS continues to maintain that 00740 and 00810 are misvalued and it “look[s] forward to receiving input from interested parties and specialty societies for consideration during future notice and comment rulemaking.” Moreover, CMS notes that although sedation services are included in certain endoscopic procedures, that anesthesia is being separately reported. As such, “[i]n the CY 2017 PFS proposed rule, CMS is proposing values for the new CPT moderate sedation codes and proposing a uniform methodology for valuation of the procedural codes that currently include moderate sedation as an inherent part of the procedure. CMS is also proposing to augment the new moderate sedation CPT codes with an endoscopy-specific moderate sedation code, and proposing valuations reflecting the differences in physician survey data between gastroenterology and other specialties.”1 As always, we encourage our readers submit comments to CMS or to reach to their professional associations and encourage them to submit comments. CMS will accept comments until September 6, 2016.
In September of 2010, we issued an alert entitled, Using Your Inner Child to Negotiate Anesthesia Contracts. In that alert, we provided some useful tips and tactics on how anesthesiologists could use their skills to successfully negotiate contracts on their, or their groups’, behalf. Because the topic of negotiating contracts is never a stale one, we thought to revisit the issue with some more tips and strategies on how you can take your negotiation technique to the next level.
In our previous alert, we reviewed negotiating strategies presented by Bill Adler and Ron Shapiro. While we continue to maintain the importance of the strategies presented by those experts, we provide you with some more strategies that can be added to your toolbox:
1. Rank What is Important to You
Oftentimes, each side has a deal breaking item on which it cannot budge (e.g., compensation). Instead of approaching negotiations from the perspective that the deal hinges on compensation, both sides should consider ranking what is important to them and sharing with the other side their list of priorities. What they may learn is that, while compensation is of utmost importance, services or obligations making up the compensation may be less important and may be negotiable, thereby opening up the compensation issue for negotiation.
2. Honesty and Truthfulness Can Go a Long Way
It is not uncommon to approach negotiations by keeping your hand very close to the chest. However, revealing something at the outset of negotiations can open the door for optimal outcomes. That something need not be material to the negotiations, but discussing general hopes or concerns, or a little about yourself may be a small effort that can go a long way in making the other party receptive to a discussion.
3. Make the First Offer
This seems counter intuitive because, as with the previous point, many like to keep their hands very close to the chest. However, the first offer is always the starting point of negotiations. More often than not, the party that makes the first offer is closer to its target position at the conclusion of the negotiations.
4. Don’t Negotiate Against Yourself
When negotiating a contract, parties may strike whole provisions stating the provision, as written, is not agreeable. One’s instinct may be to propose an alternative to which that party *thinks* the other side will agree. Why give away your upper hand by making the proposal? Remember: the stricken provision was the first offer. The next offer should come from the other side. Don’t negotiate against yourself.
5. Make Smart Counteroffers
Two points on making counteroffers: (a) make them, and (b) be smart.
(a) Make Counteroffers
If an issue is important, even if it satisfies what you are looking for, do not feel compelled or obligated to accept it; use it as a bargaining chip. For example, make the point that you are only agreeing to the payment terms if the indemnification language is more favorable.
(b) Make Smart Counteroffers
Coming off our previous point about not negotiating against yourself, making counter offers can be an art. It is important not to come in too low (or, conversely, too high) to keep the negotiations alive, to be taken seriously, and to be respected as a future business partner. Counteroffers should be reasonable, practical, and realistic.
While there is no finite list of tips and strategies, we hope these additional tips will assist you in your current and future contract negotiations. Good luck!
With best wishes,
Tony Mira
President and CEO
