How to Use Your Medicare Advantage Contract to Improve Your Month-to-Month Cashflow

How to Use Your Medicare Advantage Contract to Improve Your Month-to-Month Cashflow

When we started our Medicare Advantage plan, the insurance company pre-paid us $25 per member per month (pmpm) every month to meet our monthly expenses. Then, they paid us the balance after reconciliation every six months.

Fifteen years later, they were paying us more than $100 pmpm.

Why?

We asked.

As our performance improved and our reconciliation checks grew larger (one was so large it had to be signed by the insurance company’s CEO himself), we requested an increase in our monthly draw.

They agreed.

A couple of years later, we did it again—and again they agreed.

Never once did they turn us down.

Then again, never once did they offer to increase our draw on their own.

And that’s the lesson.

If your contract is doing well and you find yourself with ever larger reconciliation checks, ask for some of that money sooner in the form of a higher monthly draw.

You would think with a tactic this simple, everyone would do it.

You would be wrong.  Surprisingly, few organizations think to ask for an increase in their monthly draw.  Try it.

Don’t increase it too high, though.  If you draw too much money, reconciling may mean paying it back instead of getting paid.

But if your performance supports it, there’s no reason you have to wait for quarterly and semi-annual contract reconciliations—ask for some of that money now.