Negotiating lab pricing with vendors as a DPC practice

Healthcare costs are a major concern for patients and for providers. The direct primary care (DPC) delivery model is designed to reduce those costs while enabling the physician to provide high quality, individualized care. Part of the cost savings results from the DPC provider’s ability to offer less expensive lab services. The key in delivering this benefit is negotiating lab pricing with vendors as a DPC practice.

The first thing to be aware of is that laws regarding lab services and billing do vary by state so be sure to verify the regulations for where your DPC practice is located. In 2021, 19 states had direct billing laws, which means that the lab must bill the patient directly. Eight states had anti-markup laws and 16 states had disclosure laws, meaning that you must provide your patients with your wholesale costs at their request.

Regardless of the regulations in your state, you can still help your patients save money by negotiating lab pricing with vendors. It is common for DPC practices to negotiate contracts with laboratories, imaging services, and pharmacies to give patients discounts, further saving them money and worry.

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Negotiating lab pricing may seem challenging at first. There are a few strategies that can help you be more successful in lowering the costs of such services for your practice and for your patients.

• Be persistent: Continue to work with the lab representative until you are satisfied with the prices they are giving you for their services. Negotiating can take time and patience, but both are necessary to get the best price for your patients and your practice.
• Be the squeaky wheel: You may be negotiating with a representative from a large laboratory. As an independent physician you will need to make it clear that your practice and your patients are valuable customers.
• Shop around: Negotiate with several different labs. Start with a price point in mind, perhaps even a sample price list. Ask them to match or better your desired pricing.
• Ask for client bill prices: Following the regulations for your state, ask for 100% of the bill to be sent to your practice each month. Then you can automate billing for your patients when necessary, through your electronic health record (EHR) system.
• Establish relationships: It’s easier to negotiate with people who already know you and your practice. Establish a relationship with labs who can provide the services your patients need. You can also use this strategy for imaging centers and specialty providers. Sign up with a wholesale medication distributor, for example. Use your relationships to negotiate lab pricing that works best for you and your patients.