Few decisions feel as heavy to an independent practice owner as leaving an insurance network. A full schedule at low reimbursement can feel like running hard to stand still. But walking away from a payer brings its own risk: patients who don’t follow you, and a way back that isn’t guaranteed.
A recent MGMA article makes a point worth repeating: run the numbers before giving notice. Here’s how we’d approach it, with one step we think comes first.
Step 1: Separate Two Problems That Look the Same
When a payer feels unprofitable, the cause is usually one of two things:
- Low contracted rates. You’re paid exactly what the contract says, and the contract just isn’t enough.
- Payment below the contract. Underpayments, unworked denials, and slow collections mean you receive less than you agreed to.
These need different fixes. If the second is the real problem, dropping the payer doesn’t solve it. It just moves the leak somewhere else. Audit payments against the contract before you decide the contract is the issue.
Step 2: Pull the Numbers for Each Payer
Use a recent 12-month window, long enough for claims to be fully paid. For each payer, gather:
- Completed visits and unique patients
- Total collections, from the insurer and the patient share (deductibles, copays, coinsurance)
- Payment delays and denial rates
- Staff time spent chasing problems
Compare like with like. A payer with longer, more complex visits can look better per claim while costing far more clinical time.
Step 3: Count Only the Costs That Would Actually Go Away
Fewer claims may lower an outsourced billing fee. They won’t lower rent, software subscriptions, or a salaried employee’s pay. Time saved on appeals is real value, but it only counts as cash savings if spending drops.
Step 4: Try a Smaller Move First
Leaving isn’t the only option. Before you give notice, consider:
- A written rate request that names the services driving the problem, the rates you need, and a date you need an answer by.
- Documenting the access you provide, like appointment availability or hard-to-find services.
- Checking whether your contract lets you stop taking new patients from one plan while continuing care for existing ones.
Step 5: Know the Road Back Before You Leave
Returning to a network is not automatic. Participation involves credentialing, contracting, and an effective date, and a payer can decline to reopen a panel. Before terminating, ask the payer in writing:
- Would you need a new application or contract?
- Is there a waiting period before you can reapply?
- Could the panel be closed to your specialty or area?
- Would your old rates still be available?
Plan your finances to survive a longer gap than you expect.
Step 6: Plan the Patient Side
Review notice requirements in your contract and state rules before setting a date. Patients need plain answers about the effective date, their options for continuing care, and how to get their records. Some patients may have continuity-of-care protections, so check eligibility rather than assuming. Medicare and Medicaid follow separate rules, so involve qualified counsel before changing how you handle those patients.
Step 7: Decide What Success Looks Like
Before you act, finish this sentence: “We can sustain this change if we complete at least ___ visits a month, collect ___, and keep cash reserves above ___.” Then set review dates, so you can correct course early rather than after your reserves are gone.
Based on an MGMA Insight article by Chris Harrop, “Should your private practice drop an insurance plan? Run the numbers before giving notice” (Oct 1, 2026).
Where to Start
Not sure whether your payer is underpaying you, or whether the contract is the problem? We can help you tell the difference.
Or schedule a free 30-minute Practice Analysis, where we look at your actual numbers together. No cost, no obligation.