Round 1 Sample Negotiation
Sample Round 1 Dialogue – "Just Get the Rate Done"
Time Pressure Context
Public termination announcement hits tomorrow.
Payer has another bad press story coming next week.
Both sides have clear internal rate targets (Provider 340%, Payer 250%, payer willing up to 320%).
Opening (Minutes 0–3): Anchors and Framing
Provider (NorthRiver):
"Thanks for making the time today. As you know, our notice is out and we're hours away from needing clarity for our board and our physicians. We've been underpaid for years relative to market. We're at 180% of Medicare today; the regional median is about 250%. We've proposed 340% to start to close that historic gap."
Payer (HorizonHealth):
"I appreciate the urgency. We also have serious concerns about disruption for our members and employers if this isn't resolved today. From our side, 340% is not something we can defend internally. We're at 250% of Medicare, which aligns with regional medians, and frankly we're already getting questions from corporate about trend."
Provider:
"I understand 340% is a big move, but we've carried below-market rates for years while costs, staffing, and regulatory requirements have climbed. To stay viable, we need a material correction, not a cosmetic adjustment."
Early Bracketing (Minutes 3–6): Narrowing the Range
Payer:
"Understood. Look, I want to be direct: we need to avoid going public with a termination tomorrow. I have a little room above 250%, but nothing close to 340%. If we're going to keep talking, we need to be in a realistic zone."
Provider:
"Then let's talk realistic. If 340% is a stretch for you, 250% is completely unacceptable for us. We both know hospitals like ours are in the mid- to high-200s or above. We need to be looking at something starting with a '3' to even have a conversation with our CEO."
Payer:
"I can't start with a '3' and survive the internal review, not in one jump. Could we frame this as a multi-year path? For example, 260% Year 1, escalating over time?"
Provider:
"Given the hole we're in, 260% doesn't clear the bar. We're asking for a structural reset, not a slow crawl. If we don't make a meaningful move now, we're back here fighting in a year."
Escalating Pressure (Minutes 6–8): Time and Consequences
Payer:
"I hear you. Let me be transparent: if we don't have a deal today, we're both facing angry employers, confused members, and a lot of media heat. And I've got another negative story dropping next week in a different market. I do not have the luxury of dragging this out.
Here's where I can stretch: I can look at something in the high 270s, maybe low 280s, with a reasonable escalator. But that's going to take some defending on my side."
Provider:
"We're also out of runway. Our board meets later today. If they don't see movement toward market, the instruction will be to proceed with termination and prepare for out-of-network. High 270s feels light given how far below market we've been.
If we're going to avoid disruption, we need to see something closer to 290% with an escalator that keeps us from falling behind again."
Payer:
"Realistically, 290% is going to be extremely tough to get through. I don't want to mislead you. If we're going to land this, I think we're talking about a narrow window."
Closing the Gap (Minutes 8–10): Split-the-Difference Finish
Payer:
"Let me propose a path to closure. If we can agree, right now, to 285% of Medicare with a 3% annual escalator, I will commit to pushing this through immediately and getting you an executed amendment today. That keeps you meaningfully above current, closer to market, and keeps us from blowing up the network on both sides."
Provider:
"285% is still below where we believe we should be, but I recognize the time constraint. 3% escalator helps, but we're going to take heat internally for not closing more of the gap."
(Brief silence)
"If we lock at 285% with the 3% escalator, effective immediately, and we both commit to communicating this as a joint solution that protects patient access, I can take that back and frame it as a necessary compromise to avoid disruption."
Payer:
"Agreed. We'll coordinate messaging to employers and members that we reached a resolution and ensured continuity of care.
So we're aligned: 285% of Medicare, 3% annual escalator, effective on execution today?"
Provider:
"Yes. For purposes of today, we're agreed. Let's get the paperwork drafted and signed so we can both stand down our disruption plans."
Payer:
"Done. I'll have my team send over the amendment within the hour."