Frustrated doctor with his hands on his head.
Trevor McElhaney, JD | DoctorsManagement, LLC

For many DoctorsManagement clients, Managed Care Contracts (MCC), the agreement between providers and the insurance plans they accept, are a point of frustration (and sometimes anger).  MCCs form the fundamental basis between physicians, advanced practice providers, and other clinical staff, the general public, and the governmental and private companies within our healthcare system.  These contracts are intended to outline and compensate providers for the cost, quality, and accessibility of the care they provide.  

Specifically, many providers feel helpless in the face of dwindling reimbursement, longer global periods, uncovered services, etc.  And, while reimbursement rates should always be a fundamental factor in any MCC negotiation, there are other items that should also be considered when evaluating the choice of participation in a particular arrangement.  A few of those items are outlined here: 

1. Term and Termination Provisions.  Understand the term of the agreement – many MCCs are for a period of three or more years with very little negotiating power, if any, during that time. 

If you choose to exit the plan, for whatever reason, what notice period is required?  Typically, a plan will need at least 90 days’ notice of termination – others require a specific opt-out period which may require participation for much longer than you wish.  

2. Timely Filing Requirements. Accurate record-keeping of each filing requirement and ensuring your billing team understands the importance of appropriate submission to all payers based on these timelines is crucial.  Denials due to timely filing are rare but are likely preventable.  


3.  Payer Reputation.  Some payers, based on regionality and coverage area, are required to maintain an appropriate patient census.  However, other business strategies (e.g., marketing, referral outreach, quality of care, patient reviews, etc.) can grow a patient census without the need to settle for a less than average MCC.  

4.  Notification of Amendments.  Can the payer unilaterally decrease reimbursement?  Many times, yes.  Providers typically figure that out long after the fact.  Ensure you understand how these amendments will be communicated, as well as a point person within the practice to monitor those amendments.  With this knowledge, providers can evaluate, on an annual basis, the viability and economic impact of remaining in-network with a particular payer.  

5.  Key Dates and Contacts.  Many practices do not have a copy of their MCCs, and even fewer know what they say.  Each payer contract should be kept in a file and a schedule maintained indicating key dates and contacts.  Practice leadership should know who, at each payer, they can contact that has the authority to act on a given request.  

6.  Hold Harmless Provisions.  New plans from unknown/less vetted sources are popping up around the country.  What happens if the plan goes bankrupt?  Will you be able to bill the patient for outstanding services received?  Likely not.  Always investigate the payer to ensure you believe in its longevity and ability to pay. 

7.  Billing for Non-Physician Providers.  Do any exclusions exist for the level of provider that can provide services under the agreement?  Does the MCC allow for incident-to billing for Advanced Practice Providers? If the answer is no, practices should weigh the economic impact of the agreement and how to appropriately schedule the patients it sees.  

8.  Additional Sites.  If you successfully negotiated a solid MCC, you want that plan to follow any future practice sites or acquisitions.  Ensure that the rates will remain valid for any of those additional locations and providers.  

9.  Covered vs. Uncovered.  Know what is and is not covered under the plan.  Your time and resources are limited – ensure you understand, prior to discussing potential treatment options with the patient – what you will be reimbursed for, any referrals needed, and any pre-qualifying steps that must be taken prior to treatment.  If you perform an uncovered service, you will not be paid and likely will not be able to bill the patient without sufficient prior written notice to the patient.  

10.  Maintain Your Most Valuable Tool.  In any negotiation, your most valuable tool is simply the ability to walk away.  If the MCC does not reward you for the quality of care you will provide to its patients, know when to walk away.  Perhaps you can re-engage at a later date; however, it’s a disservice to you, your staff, and the covered lives of the payer to accept an MCC you find unsustainable.  

In summary, perform your due diligence, enlist the advice and counsel of qualified and experienced parties to assist in the process, and start early.  MCCs are complex and full of potential pitfalls – ensure you give you and your team the time the process deserves to fully analyze any payer arrangement.  

By Trevor McElhaney, JD

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This article is intended to convey general information only and not to provide legal advice or opinions. The contents of this article should not be construed as, and should not be relied upon for, legal advice in any particular circumstance or fact situation. The information presented may not reflect the most current legal developments.  No action should be taken in reliance on this article, and we disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law. An attorney should be contacted for advice on specific legal issues. This article is not intended as a solicitation.
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