Managed Care Contract Negotiations
Feb 14

Exert control over a payer’s policies using these tactics

A typical payer contract requires the provider to abide by and comply with policies and procedures that the payer shall implement from time to time. In requiring providers to accommodate changes in a policy manual, payers often cite their need to be flexible, to react to the marketplace, and to make improvements in their systems. While agreeing to these requirements, providers still can ask for the following smaller changes that may be acceptable to the payer:

  1. Request a copy of the payer's current policy manual and have it reviewed by subject matter experts within your organization to ensure that you are willing and able to comply with existing policies.
  2. Make sure your agreement includes a clause expressly stating that nothing in a policy can override any term of the agreement.
  3. Know whether your state law restricts the payer's ability to amend its policies, including notice requirements. Study recent settlement agreements to a class action lawsuit brought by physicians against several managed care organizations charging them with, among other things, violation of the Racketeer Influenced and Corrupt Organizations Act.
  4. Specify the employee within your organization who will be notified of changes and the manner in which the notice will be provided. Ask for a second employee to receive the notice in case of illness or vacation.
  5. Ask the payer to provide advance notice of all policy changes that affect your organization so you have time to make internal changes that are necessary to comply.
  6. If the payer publishes its policies online, ask for summaries of all changes that affect you and links to the pages that contain each change.
  7. Ask that policy changes be limited in frequency to a few times per year.
  8. Prohibit policy changes that affect financial policies, bundling, or coding. If the payer refuses to accept this language, seek a right to protest changes that affect your finances.
  9. Ask to reopen the rates if a policy change adversely affects your payment, is costly to comply with, or otherwise denies you a benefit of your bargain.
  10. Beware of clauses asking you to "net out" favorable policy changes against adverse changes.
  11. Don't settle for language that simply allows you to terminate the agreement if unsatisfied with a policy change. Negotiate intermediate steps-a right to compel meetings with key payer staff, for instance-before terminating the agreement.
  12. If negotiations drag, ask what concessions the payer has given in the past over protections against policy changes, then sit back and let the silence build.
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 →