Some Key Contract Language Items to Watch

It is a long list.  A long, long list.  When you are negotiating a managed care contract, there is an extensive list of items to review while getting it “done.”  I use a checklist of items in the ASC contracts I review to remind myself of the little details that help make an agreement work well for a center.  Here are a few to remember:

Unilateral Amendment – check the amendment language to make sure any amendments actually require your agreement, not just your continuation in the contract.  Some payers will provide language in their template agreements that say, effectively:

“We will occasionally change the contract and notify you of the amendment.  If you are ok with the amendment, no further action is necessary.  If you do not like the amendment, you can terminate the agreement and no longer participate in our network.”

Rather than signing something that sounds like a Medicare condition of participation, suggest that the payer incorporate language requiring amendments to be mutually agreed upon in writing ONLY.  Here comes the exception to this rule that is actually ok:  any amendments necessary to comply with applicable federal and state laws.

What happens at the end of the term? – it is great to get a new contract or update one.  Make sure that you are not being blind at the beginning of a contract to what happens when it ends: 

Are there automatic extensions? Can you only renegotiate when giving 90 days notice prior to the end of the term?  Be sure to look at what happens on the anniversary dates of a contract – does it increase? Does it end? Or do the rates just stay the same forever?

By paying attention to these things now, you can make sure the next contract with that payer is even better.

New / Unlisted Procedures – That new procedure one of your favorite docs wants to do - just how will it get paid on this contract?  Some payers will want to relegate those procedures to the minor procedure rate; others will just say they will let you know after you bill them.  Really?  When negotiating rates, new or unlisted procedures should either at a % of charges (best case) or at a high grouper / fee schedule rate, with any implants or high cost supplies covered at cost.

David Parrott, CASC, is a Principal in Batavia Solutions, an ASC consulting firm that specializes in managed care contracting and business and operational efficiencies.  To find out more about Batavia Solutions and how they might help your Center, send David an e-mail at BataviaSolutions@comcast.net