Managed Care - INFO

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 If you’re like most individuals in the managed care industry, when it comes to evaluating a contract no one knows where to start. It is important to remember that when looking over a managed care contract, you should do so with the understanding that if this contract is not acceptable to you, negotiate for acceptable terms. Contracts between physicians, hospitals and managed care health plans are becoming more complicated each year.

As managed care becomes more sophisticated, you must be prepared to contract effectively. There are too many providers who, to this very day, just sign a contract without ever reading it. During this section, we will evaluate and investigate a managed care contract. Please keep in mind that we are not offering legal advice. We are offering advice on what to look for in a win-win situation. We will list all of the specific sections which make up a contract and discuss and explain areas which will affect you.

Generally, you should evaluate a contract and ask yourself the following questions.

1. Will the contract maintain or increase you’re business?

2. How many covered lives does the managed care plan currently have enrolled within my capture area? Look at now and into the future.

3. What local/regional/national companies participate with this plan?

4. What providers are currently under contract with this managed care company?

5. Is the managed care plan financially sound? You don’t want the managed care company going out of business.

6. Does the managed care plan have a withhold, and if they do, do they have a tendency to return the withhold back to providers?

7. How long does the managed care plan take to pay claims?

You can see that by preparing yourself to ask some simple questions before you evaluate a contract, you can put yourself in the right attitude for further investigation. Usually, the following main sections are contained within a managed care Contract/Agreement.

1. Purpose

2. Recitals

3. Definitions

4. Responsibilities of Parties

5. Indemnification/Hold Harmless

6. Confidentiality

7. Dispute Resolution

8. Independent Contractors

9. Amendments

10. Term and Termination

11. Governing Law

12. Warranties

13. Assignment

14. Insurance

15. Notices

16. Continuation of Services

17. Entire Agreement

18. Compensation

19. Billing

20. Marketing/Name Use

21. Signature Page

22. Exhibit

Listed below, we have written a complete (sample) contract, between you and a fictitious insurance company named Any Insurance Company, which contains all of the areas listed above. It is important to understand that contracts can vary and that some sections might be different, while others omitted. Make sure that you have a qualified individual or consulting company help you with any contract. Following this contract, is a list of qualified consultants who can assist you.

 1. PURPOSE

This agreement is made and entered into by and between You (hereinafter called the GROUP), and Any Insurance Company, Inc., a corporation organized under the laws of (any state), (hereinafter called "AIC", having its place of business at 1234 Anywhere Street, Anytown, USA 55555).

2. RECITALS

A. Whereas, AIC is a (any state) Corporation, incorporated for the purpose of organizing health care providers into programs that make health care services available to enrolled members.

B. Whereas, AIC retains the right to determine persons eligible for this program or for other programs.

C. Whereas, AIC and GROUP desire to enter into this Agreement on the terms and conditions described below.

D. Whereas, the GROUP is an entity organized for the purpose of providing, or arranging for the provision of comprehensive health care services to individuals, and desires a contract/agreement with AIC for the provision of services by its network of providers.

Now, therefore in consideration of promises and mutual covenants contained in this Agreement and other valuable consideration, GROUP and AIC agree as follows:

3. DEFINITIONS

3.1 Acute Care Facility - a facility, such as a hospital, which offers a variety of medical services; including, pediatric, surgical, and obstetric services.

3.2 Benefit Period - a period when health care benefits begin and end.

3.3 Claim - an itemized statement of services provided by a health care provider for an episode of care.

3.4 Complete Claim - a claim for payment of Covered Services containing all information reasonably necessary for claim adjudication.

3.5 Contract Year - the period of time from the effective date of the contract to the expiration date of the contract.

3.6 Date of Service - the date on which health care services are provided to the covered person.

3.7 Family Dependent - a person enrolled for coverage under an insured person.

3.8 Member Month - a term used to describe each month that a person is actively insured.

3.9 Risk Sharing - the process of establishing financial arrangements, utilization controls and other mechanisms in order to share the financial risk of providing care among providers, payers and users.

4. RESPONSIBILITIES OF PARTIES

4.1 Authorization: The GROUP hereby authorizes AIC to contract with Payors on behalf of GROUP. The GROUP shall require the GROUP Physicians , Hospital, and providers to provide hospital and medical services to eligible members, subject to the terms of this agreement.

4.2 Medically Necessary Services: The GROUP providers agree to provide only medically necessary services to eligible members and further agree not to bill members for services which are deemed not to be a medical necessity. Further, the GROUP shall require each GROUP provider (hospital and physician), to render services to covered members according to this agreement.

4.3 Quality Management Programs: The GROUP shall require the GROUP providers to participate in the AIC’s quality management programs including utilization review programs which address the areas of Pre-Certification, Discharge Planning, Medical Case Management, Disability Management, and Return to Work programs.

4.4 Discrimination: The GROUP shall ensure that GROUP providers do not discriminate against eligible members on the basis of race, religion, national origin, color, sex, marital status, sexual orientation, age, health status, or disability.

4.5 Professional Requirements/Credentialing: The GROUP shall represent that all of its GROUP providers currently maintain the proper licensure within the state of (any state). The GROUP shall notify AIC if any of its providers experience a sanction, loss of license, or suspension in any state and federal program.

4.6 Single Signature Authority: The GROUP shall execute contractual agreements, which all GROUP providers agree to accept, including but not limited to physicians, hospitals and other providers which make up the GROUP network.

4.7 Records: The GROUP shall require all GROUP providers to prepare and maintain medical, financial and other records relating to the care rendered to Covered Members in such form and detail as is consistent with accepted medical standards. The GROUP and its providers shall make all records available for inspection by AIC, Payors, or any authorized state and/or federal regulatory agency.

4.8 Medical Providers Directory: AIC will provide a Directory of Providers to the membership.

4.9 Payment of Covered Services: AIC agrees to require each payor to be responsible for payment of Covered Services either directly or through a designee of the Payor, in accordance with this contract agreement.

4.10 Health Plan Credentialing: AIC may perform appropriate credentialing of each provider to be included under this agreement.

4.11 Compliance of Laws and Rules: AIC shall comply with state and federal laws.

4.12 Member Identification: AIC will arrange for the enrolled member to be supplied with an identification card.

4.13 Medical Records / Financial Records: AIC agrees to arrange for the safe and guarded protection of all medical records relating to the health services provided to a plan member for the purpose of medical reviews.

4.14 Discrimination: AIC shall ensure that the plan does not discriminate against eligible members or providers on the basis of race, religion, national origin, color, sex, marital status, sexual orientation, age, health status, or disability.

4.15 Data Collection and Reporting: AIC agrees that it will perform data collection, data reporting.

4.16 Claims Processing : AIC agrees that it will establish and maintain a system to process and adjudicate claims for covered members.

5. INDEMNIFICATION / HOLD HARMLESS

The GROUP agrees to defend and save harmless AIC, its officers, agents and employees of any and all liabilities with respect to GROUP’s failure to perform any of its duties and obligations herein or in connection with the negligent performance of its duties and obligations, herein.

AIC hereby agrees to defend and save harmless the GROUP, its officers, agents and employees of any and all liabilities with respect to AIC’s failure to perform any of its duties and obligations herein or in connection with the negligent performance of its duties and obligations, herein.

The GROUP shall look only to AIC for compensation for services rendered to an enrollee when such services are covered by AIC’s group contract. The GROUP agrees not to bill, charge, collect a deposit from, seek compensation from, seek remuneration from, surcharge or have any recourse against enrolled member, except to the extent that copayments are collected which are specified in the group contract. This section shall survive the termination of this Agreement, regardless of the cause of termination and shall be construed to be for the benefit of the enrolled member.

6. CONFIDENTIALITY

The GROUP and AIC understand and agree to maintain the confidentiality of medical information, records, and inquiries relating to any enrolled member as required by law and shall only disclose such information to a third party while being in compliance with state and federal legal requirements.

7. DISPUTE RESOLUTION

Participating providers will use their best efforts to mutually resolve any disputes that may arise under this Agreement. Any dispute that cannot otherwise be resolved shall be resolved by binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Both providers agree that the results of the arbitration shall be binding on both parties and will remain in effect in any subsequent dispute or litigation

8. INDEPENDENT CONTRACTORS

In the performance of the terms and conditions of this Agreement, each party is acting as an independent contractor, and neither party is acting as the servant, agent or principal of the other.

9. AMENDMENTS

This Agreement may not be amended unless in writing and signed by both parties hereto.

10. TERM AND TERMINATION

The initial term of this Agreement shall be for one year and shall automatically renew from year to year thereafter unless either party gives at least sixty (60) days written notice of termination, with or without cause, to the other party.

This Agreement may be terminated immediately if either party institutes bankruptcy, insolvency, receivership and/or reorganization proceedings.

In the event that this Agreement is terminated and the GROUP is rendering current medical care to an enrolled member of AIC, the GROUP will continue to render care, according to the compensation/payment arrangements set forth in the appropriate Exhibit to this agreement.

11. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of (any state).

12. WARRANTIES

The GROUP warrants and represents that it is a (any state) corporation, limited liability corporation, partnership, association, or sole proprietorship and it is free to enter into this Agreement.

AIC warrants and represents that it is a (any state) corporation, in good standing, and duly authorized to transact business in the State of (any state).

13. ASSIGNMENT

The GROUP or AIC cannot assign this Agreement without written consent signed by the other party. At least sixty (60) days written notice to the other party is required.

14. INSURANCE

The GROUP at its sole cost and expense, shall procure and maintain such policies of general liability insurance to insure GROUP providers and its employees against any claim or claims for damages arising by reason of personal injury or death. Such policies should be not less than $100,000 in the event of injury or death to one person, and $300,000 as the result of injury or death to more than one person.

15. NOTICES

All notices must be in writing and delivered either personally or sent by registered or certified mail, return receipt requested, postage prepaid, addressed to each party at the following addresses.

GROUP: AIC:

16. CONTINUATION OF SERVICES

Upon termination, the GROUP shall continue to render services to enrolled members that are confined to a health care facility or who have not been assigned to another provider on the date of termination, unless otherwise instructed by AIC. AIC agrees to compensate the GROUP, for said medical services, in accordance with Exhibit I, for any services provided after the date of termination until such enrolled member is discharged or transferred from such facility or assigned to another provider.

17. ENTIRE AGREEMENT

This Agreement, together with any attachments , appendices, and/or exhibits, contains the entire agreement between the GROUP and AIC and shall supersede all prior agreements. This Agreement may not be amended, altered or extended without the written permission of both the GROUP and AIC.

18. COMPENSATION

The GROUP shall agree to accept as full payment for Physician and Hospital services provided to an enrolled and eligible member, for approved covered services, the compensation as described in Exhibit I of this Agreement, and to look solely to AIC or Payor (or designee of the Payor), and not to collect from enrolled member, for any monies except for applicable deductibles, copayments and coinsurance for services provided which are not covered services under the enrolled member’s group policy.

19. BILLING

The GROUP or its providers shall agree to prepare and submit billing information for all services provided in accordance with the billing procedures as outlined in the AIC provider manual. The proper and accepted billing forms are the AMA/HCFA 1500, UB-92 or equivalent.

Claims will only be accepted if submitted to AIC within one hundred twenty 120 days from the date of services rendered to the patient. Claims not submitted within one hundred twenty 120 days from the date of service shall not be accepted and deemed ineligible for payment by AIC or designated Payors.

20.. MARKETING / NAME USE

The GROUP shall agree to permit AIC to use the GROUP (and individual providers who comprise the GROUP’s network) name, address, phone number and specialty information in AIC marketing, advertising, or promotional materials.

AIC shall agree to permit the GROUP, (only with written authorization from AIC), to display its name, address, and phone number on marketing material which the GROUP shall utilize in marketing the provider relationship between the GROUP and AIC.

21. SIGNATURE PAGE

PROVIDER HEALTH PLAN

______________________________ ________________________________

Name of Organization Name of Organization

______________________________ ________________________________

Signature Signature

______________________________ ________________________________

Print Name Print Name

______________________________ ________________________________

Print Title Print Title

Date:_________________________ Date:___________________________

Address:______________________ Address:________________________

22. Exhibits

COMPENSATION

This agreement shall pay the GROUP, for services rendered to eligible members, clean non-contested claims for covered services within thirty (30) days of receipt of claim by AIC. The GROUP agrees to accept as payment in full the reimbursement levels contained in this Exhibit.

A. Inpatient Admissions

Medical Surgical Inpatient Admissions:

Services rendered to a Covered Patient during an approved inpatient hospital stay shall be reimbursed based on a Diagnosis Related Group (DRG) classification system.

 

B. Mental Health Inpatient Admissions

On a per diem basis of $________ for each day of admission, in lieu of a DRG payment.

C. Emergency Health Services

1. Reimbursed an amount equal to $________ for each patient requiring emergency care, or

2. Reimbursed on a fee-for service basis, or

3. Reimbursed according to the inpatient reimbursement levels if the patient is admitted to the hospital within twenty four (24) hours following and receiving emergency services, or

4. Reimbursed according to the established urgent care payment schedule for patients entering the urgent care facility.

 

D. Ambulatory Surgery

1. A per case fee according to CPT-4 codes . The per case fee is $_________, or

2. A percentage of usual and customary charges. The percentage is ________%.

E. Outpatient Clinical Laboratory

1. A capitated per member/per month fee of $______, or

2. Fee-for-service according to the established GROUP fee schedule, or

3. Billed charges less any appropriate deductible, coinsurance or copay.

F. Pathology

1. Fee-for-service according to the established GROUP fee schedule, or

2. Included in the Capitated fee listed under Outpatient Clinical Laboratory, as explained above.

G. Radiology Services

1. Fee-for-service according to the established GROUP fee schedule, or

2. Billed Charges, or

3. A percentage of usual and customary charges, or

4 A capitated fee per member / per month of $________.

H. Physician Services

1. Reimbursement according to the established GROUP fee schedule, or

2. Capitated per member/per month for primary care physicians of $_______,or

3. Percentage of usual and customary charges. The percentage is _______%.

I. Anesthesia Services and Certified Registered Anesthetist (CRNA)

1. The established GROUP’s per unit fee of $______ plus base, or

2. No additional reimbursement. This service is being included and reimbursed under the hospital’s DRG rate.