How to Negotiate Medical Insurance Contracts Without Getting Burned

Intro 

Negotiating a medical insurance contract can feel like stepping into a maze—especially for niche specialties like midwives, birth centers, and privately-owned practices trying to balance meaningful care with business sustainability. Too often, contracts are signed based on hearsay or pressure, locking providers into reimbursement models that don’t reflect the value they bring. In this post, we’ll break down what really matters in insurance contract negotiations—from understanding your billing identity to spotting red flags before they become financial sinkholes. 

1. Know Your Identity Before You Negotiate 

Before you even approach a payer, get crystal clear on your business structure. Are you credentialed as a facility, a group practice, or an individual provider? Do you have one EIN and one NPI? Two? Your structure dictates what kind of contract you can seek—and what kind of rates you can command. 

Key terms to clarify before negotiation: 
- EIN (Employer Identification Number) 
- NPI (National Provider Identifier) 
- Taxonomy Code 

Your setup impacts not just how you are reimbursed, but how you operate within payer networks. For example, using one EIN and two NPIs offers flexibility, while having two EINs with two NPIs opens up even more strategic options for contracting. 

Just because your accountant says, “I don’t see why having two tax identification numbers is useful,” isn’t a reason to dismiss the idea. Ask more questions. Encourage them to meet with a biller who can explain why, in your case, it might be strategically essential. 

2. Set the Right Foundation 

Credentialing and contracting are not the same. Just because a provider is credentialed doesn’t mean they are positioned to negotiate a facility-level or multispecialty group practice-level contract or receive carve-outs for ancillary services like newborn care or lactation. They may also need to ensure that they’re allowed to operate as a multispecialty group and that all providers are eligible to render services and be paid. 

Ask yourself: 
- Are we credentialed as a facility or a group? 
- Are we billing professional or facility claims? 
- What services do we want paid for that aren’t in our current setup? 

3. Don’t Sign Blindly—Build a Bottom Line First 

Before entering contract negotiations, know your numbers. What does it actually cost to provide care? Know your worth. Let’s read that again. Know your worth—not just as a provider of services, but understand the full cost of providing any service. You must know the costs that go into your infrastructure, overhead, personnel, supplies, licenses, and more. Even a well-established practice would do well to perform this exercise to better understand why they’re not making ends meet—or to build the case for renegotiating. When was the last time your group got a raise? 

What does CMS say your services are worth? What are peers in your area being paid? 

Do this before any signature hits the page: 
- Compare reimbursement against the CMS Physician Fee Schedule 
- Understand global vs. bundled vs. unbundled rates 
- Look for billable opportunities outside of the global maternity rate 

4. Credentialing and Negotiations Aren’t Fast (or Easy) 

You’re not being ghosted—you’re just dealing with the glacial pace of insurance contracting. It is not uncommon for negotiations and credentialing to take six months or more. 

Real-life delays include: 
- Changes in payer reps 
- Long vacations and staffing shortages 
- Regional managers denying reasonable proposals 
- Paperwork, licenses, CAQH, and other documents not being up to date or not shared in a timely manner with the people you’ve hired to manage the process 

Keep copies of all communication, and don’t stop following up. Meanwhile, plan for financial delays and build up your line of credit if needed. 

5. Read the Fine Print (Then Map It Out) 

Don’t just skim the contract. Ask: 
- What CPT codes are reimbursable? 
- What codes are not payable? 
- What rates or percentages of a fee schedule are being proposed? Don’t assume it’s 100%. 
- Are there timely filing deadlines that differ by entity type? 
- What non-clinical obligations (e.g., translation services, transportation access) are required of the contracted group? 

Also, test your paper and EDI claim workflows before finalizing contracts to ensure claims won’t get stuck. 

6. Common Mistakes to Avoid 

- Copying another practice’s setup without questioning it 
- Accepting case rates that don’t allow for carve-outs or automatic COLA raises. Remember: a carve-out or case rate may not automatically increase with the payer’s fee schedule over time. You’ll need to request these raises yourself. 
- Underbilling by including all supplies in a single rate 
- Not having out-of-network plans or self-pay policies in place 

7. Final Thoughts: Contracts Should Serve You, Not Cripple You 

Take the time to build the contract that fits your practice. It’s worth the effort, even if the process is slow and frustrating. Negotiate from a place of clarity, not desperation. And when in doubt, seek professional guidance. A poorly structured contract costs more than a consulting fee ever will. 

If you're a midwife, birth center, or small practice navigating payer contracts, know this: you deserve a seat at the table—and you can negotiate like it. 

Need help? 

This is what I do. From credentialing and contracting to billing audits and workflow strategy—if you're looking to renegotiate a bad deal or structure a smart one, reach out.