Contracting with Insurance Companies: How to Negotiate Better Reimbursement Rates

Mar 28

For behavioral health practice owners, contracting with insurance companies is a necessary step to attract clients and ensure steady revenue. However, many providers find themselves frustrated with low reimbursement rates that don’t reflect the true value of their services.

The good news? Reimbursement rates aren’t always set in stone. With the right approach, you can negotiate better terms and maximize your earnings. In this blog, we’ll cover key strategies to help you secure higher rates and stronger contracts with insurance payers.

1. Know Your Worth: Gather Your Practice’s Financial Data

Before entering negotiations, you need to understand your costs and revenue needs to ensure you're not accepting rates that put your practice at risk. Consider:

Your operating expenses (staff salaries, rent, software, etc.)
The average time spent per client session (including documentation and follow-ups)
Your current reimbursement rates vs. your cash-pay rates
What your competitors in the area are charging (if available)

This data will help you determine the minimum rate you can accept while keeping your practice profitable.

2. Research Payer Fee Schedules & Industry Standards

Each insurance company sets its own fee schedule, which dictates how much they’ll reimburse for specific CPT codes. You can:

Request the fee schedule from the insurance company directly.
Compare rates across multiple payers to identify lower-paying insurers.
Check industry benchmarks (state associations may provide average reimbursement rates for behavioral health services).

If your rates are significantly lower than average, you have a strong case for renegotiation.

3. Highlight Your Value & Unique Offerings

Insurance companies want to contract with high-quality providers who help them maintain network adequacy and meet patient demand. When negotiating, emphasize:

Your specialization (e.g., trauma therapy, EMDR, child & adolescent care)
Any certifications or credentials that set your practice apart
The number of clients you serve and appointment availability (especially if you offer evenings/weekends)
Your patient outcomes and how you help reduce long-term healthcare costs

Demonstrating your value can help justify higher rates.

4. Strengthen Your Leverage Before Negotiating

Insurance companies are more likely to approve higher rates when they need you in their network. You can boost your leverage by:

Growing your client base – A high volume of insured clients requesting your services can push payers to offer better rates.
Being one of the few specialists in your area – If you offer niche services that are in demand, use this as a bargaining chip.
Building a track record of clean claims – Payers prefer providers with low claim rejection rates and efficient billing practices.

5. Make Your Case & Ask for Specific Rate Increases

Once you have your data and leverage points ready, it’s time to initiate negotiations. Here’s how:

Request a contract review – Contact your provider relations representative and ask about increasing your rates.
Be specific – Instead of asking for a general increase, request a 10-20% increase on specific CPT codes that are underpaid.
Show data – Use your research to justify why your rates should be adjusted.

6. Be Ready to Counteroffer & Negotiate Alternatives

Insurance payers may push back, so be prepared to:

Ask for a phased increase (e.g., a small raise now and another in a year).
Negotiate better payment terms (faster reimbursements, reduced claim denials).
Reassess the need for certain insurers – If a payer consistently underpays, consider whether staying in-network is worth it.

In conclusion, negotiating better reimbursement rates can significantly impact your practice’s financial health. With the right preparation and strategy, you can advocate for fair pay while keeping your services accessible to insured clients.

Need help managing your contracts, claims, and revenue cycle? While it’s no longer possible to negotiate on your behalf with payers, BreezyBilling helps behavioral health providers optimize billing, reduce denials, and maximize revenue. Contact us today to see how we can support your practice!