For any contract to be successful, all parties involved must agree to the terms and conditions. When that doesn’t occur, disputes can tank not just the deal but the relationship as well. Overcoming common contract negotiations can do the opposite – build a strong relationship and long-term loyalty between the parties.

Consider the following common contract negotiation challenges and how to overcome them.

Lack of Understanding All Parties and Their Motivations

Heading into any contract negotiation with knowledge of the other party and their motivation for this opportunity is a core tool. It enables companies to use that information to help secure a deal while also carving out benefits for their needs. By understanding the other party, it’s more likely that you can work together to come to an agreement on virtually every element of the negotiation process. This also means ensuring all stakeholders are identified. 

Define Services and Increase Transparency

Contract negotiations often fail when one party believes the other is not being honest or clear on the services they are offering or providing or in some other aspect of the deal. By improving transparency in every area of the negotiation, including the objectives, goals, costs, and expectations, it is possible to significantly increase trust, ensuring a more efficient negotiation process. To do that, clearly define all aspects of the contract’s terms and conditions. Use clear language and work towards resolving any misunderstandings early on.

Ensure a Clear, Defined Process Is in Place

Contract negotiations should involve a clearly defined process, especially in the area of escalation and approval. That is, it should be clear who the contacts are at every stage of this process, as well as who specifically is involved in the final decision making. This process eliminates the “who do I talk to” concern or the common problem of having to work through multiple people to get an answer or revision. Then, communicate that process at the start of the negotiation. 

Define Potential Risks and Create a Communication Plan for Managing Them

In nearly all contract negotiations, areas of concern will develop. This could include large-scale complications but often even smaller factors that could jeopardize the entire proceedings over details. Prior to entering into negotiations, define what potential risks exist for this. Ensure that there is a clear understanding of what could happen.

Then, create a clear communication plan for managing these concerns. This way, when any risks to the outcome of a contract occur, there is a go-to plan in place to investigate and resolve concerns quickly and efficiently.

Create a Strategy with Defined Objectives

While contract negotiations must bring two parties together, organizations must have a well-designed strategy that ultimately achieves their profit-focused goals. If the company’s objectives cannot be met, it becomes critical to move away from that transaction. To enter into a managed care contract, the goal is to look at all the benefits a specific contract can offer beyond just good pricing. Yet, at the end of the negotiation, the company’s objectives absolutely must be met in terms of costs and included services.

Get Exceptional Support from PayrAdvisors 

The highly experienced and skilled team at PayrAdvisors can facilitate the best long-term outcome in every situation. Our well-connected negotiators will meet your managed care negotiation needs by carefully overcoming common contract negotiation challenges. 

Learn more about the services we offer, including full contract negotiation and how our team can help your practice to achieve the best long-term outcome. We connect with the best industry leaders at the Health Plans to ensure a strong outcome and the highest possible reimbursement possible. Contact us now for a consultation.