Providers should be aware that managed care contracts often have two common problems: 1) the very important terms are not clear, and 2) the cost control provisions are unfair. In addition to the need for clarity, most managed care arrangements lack what many consider basic procedural fairness. For example, most agreements contain provisions that allow the plan to implement the rules, regulations, policies, and procedures that the plan desires at any time and often without notice or public release. The doctor does not necessarily know about these things, and such things can undermine the very language of the contract. To satisfy these concerns, the following should help:
“[Participating Provider’s] I agree to be bound by such [policies, procedures, rules or regulations] will be conditioned to [Participating Provider] receive advance written notice of any proposed adverse event or decision and a reasonable opportunity to respond to such proposal. In addition, the parties agree that to the extent the foregoing conflicts with the terms of this Agreement, the terms of this Agreement will govern. “
Sometimes, however, the payment is not really responsible for the payment, but acts as an intermediary between the provider and the payment. In those cases, it is essential to create clear lines of responsibility. For instance:
“In the event that a Payer does not make payment in accordance with the terms of this Agreement, [Plan] shall (a) make said payment on behalf of the Payer, (b) initiate legal action to recover said payment on behalf of [Participating Provider], or (c) assign the [Participating Provider] the right to initiate such action. In the case of (b) or (c), the Payer shall provide [Participating Provider] a copy of the agreement on which [Participating Provider] you can rely on the pursuit of such action and it will release [Participating Provider] of any other obligation to provide services to [Members]. “
It is also quite common for doctors to be denied payment even to patients who were licensed and treated. In addition to requiring the plan to identify members, the following should be helpful in dealing with such cases:
“Verification of coverage at the time of service will be final. In addition, notwithstanding anything to the contrary in this Agreement, any pre-authorized admission or covered service will be paid, regardless of any subsequent benefit determination.”
Even after a provider signs a contract, the managed care company does not always meet its contractual obligations to pay in accordance with the contract, resulting in many practices that leave money on the table and ultimately remain in the bottom line (i.e. earnings). for the managed care business. MGMA states that only 35% of healthcare providers and companies appeal denied claims! The key to mitigating this financial impact is knowing the problem before it becomes a trend. For example, one of the ways to get ahead of a developing trend is to monitor the rate of denial of payment. A denial rate is, by definition, a percentage of claims denied for payment. A low denial rate indicates healthy cash flow. A good benchmark for paying for compliance would be a 5-10% denial rate. Often times, healthcare practices and businesses operate at a much higher rate, and even in the 20-30% range without even knowing it. The AMA states that a 5% denial rate for an average family practice equals approximately $ 30,000 walking out the door!
It makes sense that this perfect storm of poorly negotiated and constructed contracts, rising rejection rates by payers, and breached contractual obligations will leave many healthcare providers and companies feeling like a cartel now managing their practice and results. However, there are many opportunities throughout the progression of the managed care process for healthcare providers and businesses to regain control.
