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Once is never enough. That’s the advice legal experts offer for checking out the list of contractual requirements from managed care insurers. As the market gets more competitive in many areas and contracts get more complex, some contract experts warn that practice officials need to look at the contracts themselves, know the key topics to look for, and hire legal help.
In North Carolina, a group of physicians quit a managed care contract with Healthsource after learning they’d lose their withhold amounts. However, it turns out that once they examined the contract, they found the company was not required to give them the withhold, says Sandy Vandervarrt, JD, director of managed care for the North Carolina Medical Society in Raleigh.
What else should physicians pay close attention to? To find the answer, the medical society pursued a checklist of key items you should make sure are included in a managed care contract. The following checklist, developed by Andre Hampton, JD, a contracts specialist with Smith, Anderson, Blount, Dorsett, Mitchell, and Jernigan in Raleigh, is not intended as a substitute for formal legal review. And while this list is not exhaustive, it points out some important factors:
- The contract sufficiently identifies the party or parties responsible for payment so you can investigate their financial strength, client base, and reputation.
- The contract not only requires payment of your fees within a specified number of days; it also provides meaningful incentives for the payer’s compliance with this requirement.
- The contract allows you reasonable time to submit completed bills, and allows you to submit bills after the designated time when extra time is required due to circumstances beyond your control.
- The managed care organization (MCO) has provided you with a detailed written description of the procedure for verification of patient eligibility and coverage. The contract also requires the payer to pay you for noncovered services rendered due to a mistaken verification, as long as you followed the correct eligibility verification procedures.
- The MCO has provided you with detailed descriptions of utilization review, quality assurance, and dispute resolution protocols. Also, the protocols are fair, and they provide for meaningful input by practicing physicians.
- The contract does not hold you to a standard of medical practice higher than that for a reasonable physician active under the same or similar circumstances.
- If the contract requires you to provide anything other than medical services (for example, your participation in the MCO’s peer review committee), it also provides you with adequate legal protection and reasonable compensation for such activities.
- The contract specifies the amount and type of insurance covering the MCO’s activities under the contract and provides that you will be covered as an additional insured.
- The contract does not require you to obtain more coverage or different types of insurance from your current insurance.
- The contract does not require that you indemnify and hold harmless any other party.
- The contract gives you the right to reject any new groups of patients or alternate fee arrangements without terminating your right to provide services to existing patients or groups under the contract.
- The contract does not contain provisions that require you to significantly alter your practice for example, with respect to your availability, referral practices, or staffing.
- If there is a fee-for-service component, you are able to translate the fee schedule into real dollars per hour or dollars per procedure.
- If the contract provides for or contemplates capitation, risk sharing, or withhold arrangements, the descriptions of these arrangements are sufficiently clear and detailed to allow you to fully evaluate the risks you are accepting.
- The contract provides that after termination of the contract, and until the MCO has made medically appropriate referrals of patients who continue to need your service, the payer shall pay your standard fees for services that you render to such patients.
- The contract allows you to bill patients in the following ways:
1. when the MCO or payer fails or is unable to pay;
2. for services not covered by the contract;
3. when you have advised the patient that the MCO or payer has determined that the proposed services are not medically necessary.
- The contract prohibits the MCO from disclosing any information provided by you or about you in connection with any credentialing or peer review deliberations, unless such disclosure is otherwise required by law.
- The MCO has given you all documents that relate to the contract.
- The contract incorporates any verbal representations that the MCO made to you about the plan and its operation.