Once provider organizations understand their competitive positioning, they should compare their contracts across different payers, including by line of business (commercial, Medicare Advantage, Medicaid managed care).

Effective payer scorecards should incorporate:

• Actual reimbursement vs. expected reimbursement
• Maximum amount of potential earnings vs. what an organization is contracted to earn
• How reimbursement compares to Medicare reimbursement
• Denial percentages

To ensure comparability across payers, organizations should perform Medicare relativity calculations to evaluate all contracts as a percentage of Medicare.

Competitive analyses and payer scorecards offer leaders a more comprehensive view of their organizations and help inform their contracting discussions. Organizations should consider areas where they may potentially be vulnerable, the outcomes they want to see, and what they want to achieve in the long term.

The table below provides an illustrated example of a payer scorecard. It shows multi-year trends in expected and recognized revenue. Between 2021 and 2024, expected revenue increased by roughly 6% across commercial plans while recognized revenue decreased by 3%. Notably, non-HMO and PPO commercial plans had a significantly higher decrease in expected revenue.*

*Note: The table below shows the average annual trends of expected and recognized revenue from 2021-2024. Download the report to view each individual year in the example payer scorecard.

After analyzing their different payer contracts, leaders can identify potential opportunities to increase revenue.

Below, the table on the left tab shows the current state of an organization’s Medicare Advantage (MA) contracts, specifically reimbursement across different revenue components. It allows leaders to evaluate revenue across different payers.

The table on the right tab details four changes the organization could make to their MA contracts to increase their potential revenue. Overall, these opportunities represent a $20 million increase in potential revenue across three different payers.

After evaluating your competitors and current contracts with payers, you will have a better understanding of how to approach contract negotiations.

For risk-based contracts, providers must ensure alignment with payers on incentive design for financial goals, as well as the behaviors needed to achieve those goals. Instead of variable compensation based on productivity, providers can consider including quality incentives, such as utilization metrics or reduced ED visits, as part of the negotiations.

Providers should also identify what they want from payer partners before entering negotiations. Misaligned expectations or limited data sharing between payers and providers can undermine trust and make the contract negotiation process more difficult.

Key questions organizations should explicitly address include:

• Do my payer partners just want to increase revenue from premiums, or do they also want to decrease costs?
• What kind of risk is being transferred from payer to providers? Are payers willing to work with providers on these risks?
• Are payers passing along risks for things that physicians can't manage? (Ex. high-cost pharmaceuticals)

For more insights into successful plan-provider partnerships, check out these ready-to-use slides.

Actuarial support is also a key component of the negotiation process and can help providers level the playing field. While health plans have healthcare economics departments led by actuaries, most provider organizations don't have the same level of expertise — putting them at a disadvantage from the start.

Actuaries can create mathematical models of contracts being proposed so providers can see the flow of the population, potential opportunities, the maximum and minimum amounts available from these opportunities, what kinds of risk is being transferred, and more. Throughout the negotiation process, actuaries can also model the impact of different proposed rate changes and rate structures, including by service categories.

Actuaries can also analyze the language used in contracts and highlight any terms that organizations should be concerned about. For example, does the contract include any material change limits? Does the contract provide payers with control of certain areas? Are payers allowed to force changes to things that are outside of providers' control?

Because actuaries understand the risk and range of possible outcomes associated with a contract, they can help providers understand what components are in their control and protect them from any potentially damaging terms.

Overall, readying both data and actuarial support can help better prepare providers for payer contract negotiations. This will help organizations argue their position and showcase their value to payers more clearly.

After a successful contract negotiation, organizations can continue to leverage data to demonstrate the value of their care delivery beyond reimbursement numbers. Organizations can highlight how they compare to competitors or peers and better understand variations in care, including utilization, cost, quality, network retention, and site-of-service comparisons.

A value analysis can help organizations pinpoint their strengths and weaknesses, both at an aggregate and an episodic level, and can help them understand how payers view them compared to other organizations. Consider whether something you're doing is different from everyone else, or if payers prefer your organization for specific reasons.

Some potential ways to demonstrate value to payers include:

• Showing that you manage procedures or episodes that other hospitals in your area don’t
• Having lower utilization rates for certain populations
• Offering specific referral patterns for specialty care
• Providing effective care in specific categories, like cardiology or oncology

This information allows organizations to more accurately identify where they should maintain their current processes, where they should allocate their limited care management resources, and opportunities for growth. Longitudinal claims data can also help organizations evaluate and demonstrate the effectiveness of care management programs that are foundational to value-based care.

¹ Jain R, et al. VBC contracting: 3 keys to a successful plan-provider partnership. Advisory Board. November 5, 2025.

² Jain R, Wirth C. Your guide to VBC contracting levers. Advisory Board. November 5, 2025.