Managed Care Contract Negotiations
Oct 14

Physicians should protect their practice from unfair carve-outs with an antisteering clause

When you contract with a health plan for your services, you base your deal on the reimbursement you expect to receive from the services you’ll provide under the contract. But when a plan unilaterally removes or "carves out" certain services from your contract and hands them over to an independent specialty provider (sometimes called a carve-out provider), your revenues could be reduced.

The best way to avoid this problem is to convince the plan to agree not to carve out any of your services. Because many plans won’t agree to that, urge the plan to include an antisteering clause in your contract that bars it from steering members away from you and toward the carve-out provider. You’re much more likely to get plans to agree to this compromise, experts say.

This week’s tip will tell you how antisteering clauses can protect providers. Next week we’ll provide a model contract clause that you can adapt and use in your plan contracts.

An antisteering clause can protect providers in the following ways:

  • It reduces financial risk. An antisteering clause can help reduce the risk that a provider will be hurt financially if the plan later wants to carve out services to a specialty provider.

  • It gives you the right to challenge the plan. If you have an antisteering clause in your contract, you can challenge the plan if you later discover that it steered members away from you.

  • It allows you to maintain quality of care. Having an anti-steering clause may help you to maintain the quality of care you give to plan members. For example, if a plan agrees to pay for laboratory services from a hospital even though it has also contracted with a carve-out laboratory provider, a member too sick to go to the carve-out provider can still receive the services from the hospital without worrying about coverage-and he or she may be admitted faster, says Lisa Chase, former director of managed care for Children’s Mercy Hospital and Clinic in Kansas City, MO.

    This week’s tip was excerpted from HCPro’s monthly newsletter, Managed Care Contracting & Reimbursement Advisor. For more information, click here.

  • About Reed Tinsley, CPA

    As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →