Negotiation - it's almost the American way. Yet, more often than not, it doesn't happen where physicians and insurance carriers are concerned.
A quick perusal of the Internet reveals hundreds of articles on the art of negotiation when purchasing a home. That shouldn’t be surprising. Almost everything about the purchase of a home is negotiable, from the sale price right down to some of the window treatments or appliances the seller may or may not leave behind.
Negotiation — it’s almost the American way. Yet, more often than not, it doesn’t happen where physicians and insurance carriers are concerned.
Jodi Laurence, an attorney with the Florida Health Law Center, has lectured nationally on negotiating managed care agreements. She says that when she works on an acquisition practice, there is often a file cabinet of managed care contracts that are signed but never read, and never negotiated.
“Negotiating with payers is possible, and it is a definite must,” Laurence says. “These contracts can and should be negotiated.”
Know your payer
The first thing Laurence suggests when a physician is going to negotiate a managed care plan or an agreement with an insurer is to do some due diligence and understand who you’re contracting with. Are you contracting with all their plans? If the payer is going to participate in an exchange, are you participating in that? Determine which of the insurer’s products you’re participating in — do they have something called an all-products clause?
“I just heard that there is this loophole in the Affordable Care Act with the exchanges that if patients are going to get subsidized insurance through the exchanges and they don’t pay their premiums, they have a three-month grace period before the insurance policy is cancelled,” Laurence explains.
What that means is, if a provider is providing care, that the plan may decide that it’s not going to pay those pending claims for whatever reason, and then the provider is left holding the bag and having to go after the patients privately. Or, included in the list of miscellaneous provisions at the end of the contract is an assignment provision allowing the insurer to assign the contract to a third party — or a termination without cause provision.
“Know who you’re contracting with, and know how you’re going to be reimbursed,” Laurence says. “If you leave any of these questions unanswered, it’s like signing a contract with a blank in it. And once you do, you have no recourse.”
Gain leverage, run a business
Negotiating contracts can be challenging for smaller medical practices. Laurence points out that for many it’s a catch-22, because they want to participate in these contracts, but when claims are denied or delayed, they’re hesitant to fight because they don’t want to rock the boat.
“When there’s a termination without clause provision, there’s always a concern,” she says. “‘What if they terminate me without cause because I’m complaining about not getting paid?’ The reality, however, is that you have a right to get paid. And if they terminate you without cause, you’re still going to have that right, whether you complain or not.”
As a result, many smaller medical practices are integrating with hospitals or other medical practices in an Accountable Care Organization-type setting in an attempt to have greater power in negotiating managed care contracts.
“In today’s day and age, practicing medicine is big business, and physicians have to be able to run their practice as a business, a viable business,” Laurence says. “This is their revenue stream. But, they went to medical school to be physicians, not businessmen. So, if all they want to do is practice medicine, then they should engage advisors to do the business aspect for them.”
Other contractual considerations
Laurence explains that some managed care contacts include language indicating that the managed care plan is going to be making medical decisions — quality review decisions about whether a treatment or procedure was or wasn’t medically necessary.
“You always want to stay away from that type of language; cross it out and renegotiate it,” she says. “Because the physician is there to make the medical decisions, not the third party payer.”
Most managed care contracts will also reference “other policies and procedures” such as physician appeals or grievance rights. Physicians need to make certain they receive copies of all policies and procedures. Or review them on the insurer’s website and make certain you’re comfortable with the policies.
Lastly, says Laurence, beware of an entire agreement clause.
“What that means is, if there was any kind of marketing literature or anything that [the insurer] might have told them about orally in their discussions about how they were going to handle certain things — if it’s not in the contract, you’re not getting it.”