Contract Re-negotiations (Crisis Management)

A state client designed its crisis management program to handle a certain number of behavioral health crises each year. Mid-way through the contract term, it was clear that the actual program utilization was much lower than expected – the flat fee each vendor was paid, however, had not dropped. Hoping to generate savings quickly and avoid a lengthy re-procurement, the state turned to Ikaso for project management and negotiation expertise.

Our Approach

Ikaso worked with the division director, audit staff, and agency executives to design a pricing structure that could quickly deliver more value. Ikaso was able to negotiate lower monthly fees and implement a sizable performance-based fee withhold to align vendor payments with the goals of the program. Withheld money would only be released if each contractor met key communication, crisis stabilization, and bounce-back standards.

Project Results

  • More than 20% savings over the life of the contracts
  • Contract aligned with state policy goals
  • Performance-based payment reinforcing the state's key patient outcomes
  • New contracts in place quickly, with no disruption in services and no need for a re-procurement