Before You Begin: Laying the Foundation

Successful payer contract negotiations begin with thorough preparation. Whether preparing to join a payer network as a participating provider or renegotiating an existing contract, thoughtful preparation, grounded in an understanding of your goals, capabilities, and the payer landscape, can significantly influence both the process and outcomes of negotiations.

Clarify Strategic Priorities

Effective contracting starts with a clear understanding of your organization’s goals, such as growth and expansion or delivery of new services. A thorough review of existing contracts builds understanding of contractual obligations and financial performance while identifying risks and opportunities for improvement.

Create an inventory of all payer contracts, documenting the key components of each contract. Review price transparency resource tools for data on negotiated commercial payment rates for the most common CPT codes used by pediatricians.

Identifying a Payer Contact

Once you’ve identified a potential payer(s) partner, begin by identifying the correct contact who handles contract negotiations. If you don’t have a network management contact, try various avenues, such as reaching out to your payer representative, reconnecting with other past contacts, consulting peers, or checking resources like manuals, payer website, provider portal, or contact information in your contract.

Research the Payer Landscape

Conducting research is an important step in preparing for contracting with payers. The following areas highlight topics to explore before entering into contract discussions.

Payer landscape and market dynamics

Research the payers in your market to get a sense of how much competition is in the market and whether there is a predominant payer, which can reveal how much leverage the payer has. In some cases, physicians may benefit from affiliating with a large physician-owned “group without walls” or management services organization (MSO) to gain greater contracting leverage with payers.

Payer lines of business

Before entering negotiations, it is helpful to know which lines of business (commercial, Medicaid managed care, marketplace/exchange, etc.) and, if possible, which products (ex. PPO, HMO, POS) the payer offers. It is possible that certain payers may want participating providers to contract with all offered lines of business and/or products.

Payer’s provider network

Payment methodologies

Try to gather information on the type of payment arrangements a payer may offer: fee-for-service payment, pediatric value-based care arrangements, or bundled payments or episode-based payment (eg, patient centered medical home certification, integrated behavioral health). If unsure of the payment structure a payer utilizes, ask when you indicate interest in joining the network or renegotiating.

Payer mix

Formulate Your Value Narrative

Before entering into negotiations, develop your value narrative. Articulating how your organization contributes to quality, access, efficiency, and overall value helps payers understand the benefits of your participation in the network.

Takeaway

Preparation is critical whether your organization is evaluating whether to join a payer network or preparing to renegotiate an existing agreement. By determining your priorities, understanding the payer environment, and developing your value proposition, you can move into contracting discussions with confidence and a well‑defined strategy.

Additional Resources

The Pediatric Management Institute and AAP price transparency resource tools include data on negotiated commercial payment rates for the most common CPT codes used by pediatricians.
The AMA resource, Competition in health insurance: A comprehensive study of U.S. markets, 2025 update, presents data on market share and competition by payer and product at the state and metropolitan statistical area level.
The Kaiser Family Foundation Data on Insurance Market Competitiveness provides information on market share and enrollment of the largest insurers in the individual, small group, and large group markets by state.

Next Step: Contract Negotiations

Disclaimer: This information is general in scope and educational in nature. It is not intended as financial or legal advice. A financial advisor or attorney should be consulted if financial or legal advice is desired.

Last Updated

04/27/2026

Source

American Academy of Pediatrics