The cheapest way to “complete” a PPO optimization project is to pursue only the easiest gains. The most strategic way is something different.
We get the same call several times a year. A practice tells us they already completed a PPO optimization project — through a flat-fee firm — and they want a second opinion on whether the work was thorough.
Almost without exception, we find significant unrealized opportunity.
Ohio practice: $150,000 in missed annual gain. New Jersey practice: $250,000. Michigan practice: $375,000 left on the table. Over a two-year period, the cumulative loss often falls between $500,000 and $750,000 in unrealized revenue.
The pattern is consistent, and it traces back to a single structural problem: incentive misalignment.
The incentive problem in flat-fee models
A flat-fee PPO firm gets paid the same amount whether your reimbursement goes up 5% or 25%. Their economic incentive is to spend as little time as possible on each engagement and still produce a defensible result.
That means:
- Pursue the easier carriers first
- Skip the complex, high-resistance negotiations
- Avoid carrier escalation that takes weeks of follow-up
- Stop once a presentable “win” is on the table
None of these are dishonest moves. They’re rational responses to how the engagement is priced. But they leave practices well short of what’s actually achievable.
What flat-fee models systematically skip
The carriers that take the most time to negotiate are usually the ones with the most negotiation room. Skipping them isn’t laziness — it’s math. A flat-fee firm that spent 40 hours on a single hard carrier would lose money on the engagement.
What gets skipped:
- High-resistance carriers with significant patient volume
- Network leasing relationships that need separate negotiation
- Carriers with delayed response cycles (60–90 days between rounds)
- Subgroup-level fee negotiations within multi-tier carriers
- Restructure conversations that require multiple carrier touchpoints
These are exactly the areas where the largest gains live.
What we find when we re-audit “completed” projects
The recurring findings:
- 30 to 60 percent of negotiable carriers were not approached
- Negotiated rates on the carriers that were approached came in well below ceiling
- Network leasing exposure was unaddressed
- No restructure work was attempted, only fee schedule increases
- The practice received no documentation of why specific carriers were skipped
What looks like a completed project is usually a partial one.
How percentage-based engagements align differently
A percentage-based engagement gets paid a portion of the revenue actually produced. Higher reimbursement for the practice equals higher fees for the consultant. The incentives point the same direction.
That means:
- The hard carriers get pursued
- Network leasing gets unwound
- Carrier delays don’t trigger additional fees
- Restructure work happens when restructure work is needed
- The consultant has every reason to push for maximum reimbursement
The structural difference shows up in the results.
What to ask any PPO consultant before signing
A short list of questions that reveal the structure:
- How are you compensated, and what increases your fee?
- Will you pursue every negotiable carrier, or only a selection?
- Are network leasing relationships included in scope?
- What happens if a carrier delays response by 60+ days?
- What does your engagement look like if my reimbursement only increases 5%?
The answers tell you what the engagement is actually optimized for.
Flat-fee PPO optimization isn’t bad work. It’s bounded work. And the boundary is set by the fee structure, not by what’s possible for the practice.
If you’ve already completed a PPO optimization project elsewhere and you’re not sure what was left on the table, a complimentary reassessment will tell you.
👉 Schedule your complimentary assessment: https://pponegotiationsolutions.com