Weird, Vague and New Stuff in Provider Payer Agreements: Why it is in There and What to Do About it?

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1 Weird, Vague and New Stuff in Provider Payer Agreements: Why it is in There and What to Do About it? Penny Noyes, CHC, President Health Business Navigators, Bowling Green, Ky. Penny Noyes does not have a financial conflict to report at this time. 1

2 Learning Objectives Identify unusual, vague or obscure contract provisions that can be detrimental Determine the adverse impact of these provisions Outline ways to improve contract language 2017 MGMA. All rights reserved Manage Provisions You Can t Change Payers and Networks will often not change language Awareness of Provisions Allows you to MANAGE your Agreements better Understand how provisions & regulations inter-relate Some provisions are driven by Federal or State regs Time is often of the essence don t delay action If payer says the law requires a provision ask them to cite the exact law they are referencing Challenge rep if you feel law is misinterpreted or does not apply to all products (ex: medical commercial & Med Adv, WC, Auto) or users (ex: fully insured vs self-funded) plans 2017 MGMA. All rights reserved

3 Obvious & Blatantly Important Provisions Everyone Should Check pay attention to details Rate Exhibit Amendments Term & Termination Products Timely Payment Timely Submission 2017 MGMA. All rights reserved Today s Focus on Less Obvious But Important to Realize These Lurk in the Agreements Joint Construction of Agreement Lesser of Assignment Loss of Term w/o Cause Penalties for Demographics or Use of Non par Providers Excluded Services Amend Policies & Procedures Products Regulatory or Non-Regulatory How/When Notice Can be Given Mergers & Acquisitions/Change of Control Sequestration Applied or Not to MA Rates 2017 MGMA. All rights reserved

4 Joint Construction of Agreement Example Parties acknowledge that they had the opportunity to be represented by counsel with respect to the Agreement. Therefore, notwithstanding any otherwise applicable principles of construction or interpretation, the Agreement shall be deemed to have been drafted jointly by the Parties and in the event of any ambiguity, shall not be construed or interpreted against the drafting Party. Issues Ask for it to be removed due to payer s initial drafting of agreement and unilateral power of Payer to accept or reject requested changes Matters if legal action is necessary in future 2017 MGMA. All rights reserved Reimbursement often based on Lesser of Contract Rate 80%* of billed charges OR 75% *of State Schedule for WC and/or Auto * % may vary Issues Be sure chargemaster is set high enough above Contract Rates such that the % BC does not ever apply other than when no value in FS Verify State Schedules Compare to Contract Rates If poor, lessen the % discount considerably If discounted amount unacceptable, remove product from agreement 2017 MGMA. All rights reserved

5 A Perfect Example Assignment Provision If your practice was contracted with Healthnet in the NORTH Region Healthnet reserved the right to assign the agreement to anyone, including Humana Military, and exercised it MGMA. All rights reserved Tricare Regions Changed from 3 to 2 Contractors Effective January 1, Healthnet west and humana military east Prior: Uhc west, humana military south and Healthnet north 2017 MGMA. All rights reserved

6 Tricare -Assignment of Agreement Make note that If a NORTH practice previously gave healthnet a 25% discount off of Tricare Maximum Allowable, then this discount was assigned to humana military on Jan To Renegotiate, other applicable provisions like anniversary date and term and termination from the assigned healthnet agreement also apply If your practice is in the WEST, uhc did not assign its agreements to healthnet, so an Agreement with healthnet for Tricare is necessary to be PAR with Tricare 2017 MGMA. All rights reserved Losing Term w/o Cause Example In exchange for Payer s agreement to amend the applicable Plan Fee Schedule, as additional consideration for same, Group agrees that it shall not terminate this Agreement or an attachment thereto without cause as set forth in Section 8.2 of the Agreement during the term this Amendment is in effect. Issues 8.2 allowed either party to term without cause anytime w 90 days notice (sometimes tied to anniversary) Loss of this right has no specified time limit as long as amendment in place Terminate in future of agreement or product requires cause No future means to get payer s attention to renegotiate 2017 MGMA. All rights reserved

7 More Favorable Loss of Term w/o Cause Limiting the time In exchange for Payer s agreement to amend the applicable Plan Fee Schedule, as additional consideration for same, Group agrees that it shall not terminate this Agreement or any attachment thereto without cause as set forth in Section 8.2 for a period of 12 months following the effective date of this Amendment MGMA. All rights reserved Penalties for Failure to update demographics Use of Non-Network Services or Facilities Unless prohibited by applicable law, Payer may, at its sole discretion, upon thirty (30) days prior written notice to Group reduce rates for Covered Services by ten percent (10%) for a three (3) month period should Provider fail to provide timely notice of change in Provider information to Payer as required and set forth in the Agreement, e.g., changes in notice address, location, staff and demographics MGMA. All rights reserved Payer may, at its sole discretion, upon thirty (30) days prior written notice to Group, reduce the rates for Covered Services by twenty percent (20%) should Provider fail to refer Members to Non - Par Providers in the absence of: 1) clinical reasons; 2) advance approval of Payer 3) existence of an Emergency Service need; or 4) documented Member s request for referral to an out of network provider 7

8 The big HOWEVER Amendments - General 2017 MGMA. All rights reserved Amendments Regulatory Mostly applies to Med Adv and Medicaid plans Ask for at least 90 days notice w right to object/terminate, assuming regs were known at least 90 days prior to effective date Ability to term just the affected product Might have exposure to amendment from effective date of amendment to termination date if term notice longer than amendment notice period Non-Regulatory Material Negative Impact who decides? Request Signature of Both Parties, usually answer is no so Might need to acquiesce to 90 days notice w 30 days to object/terminate Check to see if State Law re material amendments Unless otherwise herein check products and rates sections for means to amend these in different manner 2017 MGMA. All rights reserved

9 Exclusions: May be category, like lab, DME or Rx, and may be specific to an employer or union plan Letter Re exclusion by One Union Plan The contract says Dear Provider The Fund has recently received the above claim for an injectable that is not covered under the member s medical benefits. This injectable should be purchased through the member s pharmacy benefits. If Member s Benefit Program excludes certain services or limits the Member s choice of participating providers, such services are not considered Covered Services under this Agreement for such Member 2017 MGMA. All rights reserved Implementing Multi Year Escalator usually no action required but sometimes must be initiated Escalator Clause After December 1, 20XX, Provider shall give 45 days prior written notice to Payer requesting that reimbursement shall be at the terms of Exhibit XXX. Such increase shall be effective on the first day of the month following notice period. No increase shall be due absent of such notice. Send Signature Receipt December 1, 20XX RE: Notice to Implement Exhibit XXX of the Payer Amendment Effective February 1, 20XX - ABC Pediatrics, TIN XX- XXXXXXXX Dear Sir/Madame: Please accept this notice required to implement the 3% rate escalation terms of Exhibit XXX of the most recent amendment to the XXXXX agreement with ABC Pediatrics PC, TIN XX-XXXXX. These reimbursement rates defined in Exhibit XXXX shall be in effect on Feb 1, 20XX MGMA. All rights reserved

10 10.6 Notices Relatively Favorable Notice Provision 2017 MGMA. All rights reserved Less Favorable Notice Provision Newsletters, , Twitter, etc.. Any notice regarding Term and Termination; or to Provider s objection to participation in a Product shall be effective only if given in writing and sent by overnight delivery service with proof of receipt, or by certified mail return receipt requested. All other written notices may be sent by letter, electronic mail or other generally accepted media. Notice addresses are specified on the Signature Sheet to this Agreement 2017 MGMA. All rights reserved

11 Policies and Procedures Provider Manual becomes part of Agreement 2017 MGMA. All rights reserved Provider Manual/Policies & Procedures The Issues Can Change in sole discretion of Plan Means of Communication Not Defined No Timeframe for communication What if communicated 30 days prior to effective date, and Termination w/o cause is 180 days prior to anniversary Exposure for 150 days No mention of material or adverse impact requiring formal Amendment to Agreement 2017 MGMA. All rights reserved

12 Termination Patient Notice Restrictions 2017 MGMA. All rights reserved Termination Patient Notice Issues Contracts may be silent or have varying provisions Example is the extreme but some variation often found in agreements request removal on next negotiation Laws may require certain amount of notice to members by payer often 30 to 60 days prior to term date check state or CMS regs Most contracts do not prohibit notice to patients by practice as this example does 2017 MGMA. All rights reserved

13 Mergers & Acquisitions Typical Contract Provision Comments In the event Group acquires or is acquired by, merges with or otherwise becomes affiliated with another provider that is already under contract with Payer, this Agreement and other entity s agreement will each remain in effect and will continue to apply as they did prior to the acquisition, merger or affiliation unless otherwise agreed to in writing by all parties to such agreements MGMA. All rights reserved If the acquired entity no longer exists, such provisions have a disconnect, and yet payers hold firm they will not add new entity at the preferred rates and terms If acquiring, perhaps best to terminate acquired entity s agreement so that it is not already under contract with payer Med Advantage Sequestration Is 2% reduction applied in each of these 2 cases? 2017 MGMA. All rights reserved

14 Both Applied Sequestration Despite lack of clarity in the second example. Excerpt from CMS Memorandum CENTER FOR MEDICARE DATE: May 1, 2013 TO: Medicare Advantage Organizations Reducing Payments to Contracted Providers Section 1854(a)(6)(B)(iii) of the Social Security Act prohibits CMS from interfering in the payment arrangements between MAOs and contract providers. The statute specifies that CMS may not require any MA organization to require a particular price structure for payment under such a contract Thus, whether and how sequestration might affect an MAO s payments to its contracted providers are governed by the terms of the contract between the MAO and the provider MGMA. All rights reserved A Few Other Noteworthy Provisions Found in Agreements or in Regulations or Both Attachment or Other Document Trumps Agreement Timely Payment Termination Notice Site of Service Surgeries: Highest at Office ; less at ASC; and even less at Hospital Cigna moving from no SOS to SOS Non-Fac/Office and Fac/ASC & Hosp Submission of Data vague regarding if just for plan or all patients Dual Eligibility when not a Medicaid Provider Payer s First Right of Refusal to buy practice 2017 MGMA. All rights reserved

15 In Closing While there are a handful of key provisions that should always be addressed up front. There are many other issues raised in the agreement language that may help or haunt you over the term of the agreements We covered just a few today that you might need to encounter sooner than later Be cognizant of these provisions, the reasons payers include them, the laws that sometimes require them, how to get them changed or how to best manage them MGMA. All rights reserved Continuing Education ACMPE credit for medical practice executives... 1 ACHE credit for medical practice executives... 1 CME AMA PRA Category 1 Credits.. 1 *CPE credit for certified public accountants (CPAs) CEU credit for generic continuing education... 1 *CPE CODE: A W Let the speakers know what you thought! Evaluations will be ed to you daily MGMA. All rights reserved

16 Thank You. Penny Noyes Health Business Navigators 1502 Westen Street Ste 1 Bowling Green, KY MGMA.ORG 16