How much administrative friction does this payer create?

This is one of the most overlooked questions in payer contracting.

Leadership may compare two contracts based on reimbursement:

Payer A: $125
Payer B: $110

At first glance, Payer A looks like the obvious choice.

But what if Payer A also requires:

• More frequent authorizations
• Additional clinical documentation
• More claim corrections
• Higher denial volume
• More staff follow-up
• Longer payment cycles
• More complex eligibility issues

Suddenly, the $15 difference doesn’t look quite as attractive.

Administrative friction has a cost.

It consumes staff capacity.

It delays cash.

It increases rework.

And it can pull clinical and administrative leadership into processes that don’t directly generate revenue.

This is why I encourage organizations to ask:

“How difficult is it to get paid by this payer?”

Not just:

“How much does this payer pay?”

The difference can have a meaningful impact on your actual margin.

A contract that pays more but requires significantly more work may not be the better contract.