General Contract Provisions and Attachments

As mentioned, Provider Agreement content falls into four broad categories. The first two, Introduction and Provisions Specific to a Managed Care Relationship, are discussed in Part Two.

This Part Three discusses the final two categories – General Contract Provisions and Attachments, Addendums, Schedules, Exhibits and Amendments.

General Contract Provisions

These are viewed as the final part of the “Main Agreement”. The topics are generally quite similar to other types of contracts, and sequence can vary quite a bit.

Section 5 – Dispute Resolution

Often Dispute Resolution is included in General Provisions.

  • The most common Dispute Resolution procedure is some form of internal administrative appeal described in the Provider Manual, possibly followed by binding arbitration.
  • Most commonly the arbitration organization specified is the American Arbitration Association (AAA), although increasingly the American Health Lawyers Association (AHLA) is specified.

Side Note: Although it would seem logical to include “grievances” in Dispute Resolution, that is almost never done.

Section 6 – Term and Termination

  • Term of the Agreement, whether it auto-renews or continues until terminated (evergreen)
  • Termination with Notice
  • Termination for Cause
  • Opportunity to Cure – not very common, and almost never a separate provision. If included, it will be part of Termination for Cause.
  • Termination Without Cause
  • Services Provided After Termination
  • Continuity of Care
  • Rights and Obligations Upon Termination
  • Obligations that Continue After Termination

Section 7 – General Provisions

  • Assignment – parties may not assign (transfer) their involvement in the Agreement to a third party without the other’s consent
  • Amendments
  • Agreement Terms are Confidential
  • Confidential and Proprietary Information
  • Names, Symbols, Trademarks
  • No Third-Party Beneficiaries
  • Where and how to send Notices
  • Relationship of the Parties
  • Compliance with Laws
  • Governing Law
  • Severability
  • Waivers
  • Entire Agreement (“Merger Clause”)
  • Force Majeure (inability to perform due to uncontrollable circumstances)

Section 8 – Signatures

This names each entity that is a party to the Agreement and the name and job title of the person signing on behalf of the entity.

This ends the Main Agreement.

Attachments, Addenda, Exhibits,
Schedules and Amendments

These vary significantly, have widely varying titles, and have no particular order. What one Agreement calls Exhibit A-1, a different one might call Payments Amendment or Reimbursement Addendum or Rate Schedule. Schedule 1 could be followed by Exhibits A and B, then Medicare Addendum, then Attachment A-1. Some items start with their own page number 1, others may continue the numbering from the Main Agreement. It is common to include one or more “Amendments” as part of the original Agreement.

In many cases these attachments may significantly change the terms stated in the Main Agreement. That is particularly common where the overall Agreement covers both commercial and government-program product lines.

  • State-Specific Regulatory Appendix
  • Inpatient Reimbursement Schedule
  • Outpatient Reimbursement Schedule
  • Laboratory Services Reimbursement Schedule
  • Behavioral Health Appendix
  • Medicare Appendix (non-fiscal)
  • Medicare Reimbursement Schedule
  • Medicare Advantage Appendix (non-fiscal)
  • Medicaid Appendix (non-fiscal)
  • Medicaid Reimbursement Schedule
  • CHIP and STAR program Appendix
  • FEHBA Appendix
  • List of Provider’s Facilities
  • List of Carve-out Services
  • List of Contracted Payors (including TPAs, Insurance Companies, and ERISA plans)
  • Product Lines – those Provider will participate in and those it won’t

Side note: As mentioned above, it is a very bad idea to try to merge worker’s comp and other product lines in the same Agreement, so that is rarely done.

Compensation Arrangements

Compensation arrangements are almost always described in one or more attachments, not in the Main Agreement. Specific compensation arrangements vary widely and are beyond the scope of this article. In a single Agreement the reimbursement methodology may vary substantially from one product line to another and may be affected by stoploss or carve-out provisions.

A hospital’s “chargemaster” is its official list of “list prices”. Many reimbursement methodologies either expressly or impliedly look to the Provider’s “full-bill charges”, also known as “chargemaster rates”.

Compensation arrangements may include, use or address any one or more of the following:

  • Flat percentage discount
  • Capitation
  • DRG (Diagnosis Related Group)
  • Per diem
  • All-inclusive case rate
  • Specific prices for particular services
  • Re-admission within a certain time period
  • PIN’s Fee Schedule – a listing periodically compiled by a PIN of amounts it will pay for particular services
  • Carve-outs
  • Transplants
  • Stoploss
  • reimbursement methodology specific to Durable Medical Equipment (DME)
  • reimbursement methodology specific to implantables
  • reimbursement methodology specific to high-cost drugs
  • Medicare reimbursement guidelines
  • Medicaid reimbursement guidelines
  • State worker’s compensation reimbursement guidelines
  • Amounts for services for which Medicare, Medicaid, worker’s compensation guidelines do not specify a price
  • Resource-Based Relative Value Scale (RBRVS)
  • Automatic increases relative to a baseline year
  • Caps on chargemaster increases
  • Automatic rate adjustments if chargemaster increases exceed a certain amount
  • Risk-sharing methodology
  • Shared cost-savings methodology

Other Relevant Points

  1. Most states have no laws that govern managed-care relationships per se. Control is only indirect, by regulating insurers.
  2. Managed-care Agreements often say “Except as otherwise required by applicable law, the parties will [do such-and-such].”Claims reps won’t research the law. If an Agreement contradicts applicable law, most reps will ignore the “except per law” wording and insist that the Agreement controls.
  3. Entities that don’t sell insurance, e.g., “just a network” are not subject to state insurance laws.
  4. ERISA plans that are self-funded rather than “fully insured” are not subject to state insurance laws.
  5. In Texas, many state law provisions are now mandatory and automatic and may not be changed or waived by contract.
  6. Texas law has a litany of required provisions. (Particular wording is not required.)
    • Many contracts don’t contain them. “Shall follow applicable law” is not sufficient.
    • 28 TAC §3.3703, PPO Contracting Requirements
    • 28 TAC §11.901 HMO Required Provisions
  7. Boilerplate contracts “written for use in any state” will never satisfy Texas’ extensive laws and will always need at least a state-specific addendum.
  8. In ASO, TPA and ERISA plan situations, terms of the Payor’s plan routinely override terms of the Agreement between the Provider and the PIN.
  9. Insurers/networks keep moving more terms to provider manuals, which they unilaterally control.

Traps for the Unwary

As mentioned, Participating Provider Agreements are almost always drafted by the Payor, Insurer or Network, not the Provider. They routinely are extremely one-sided – some don’t even have an Obligations of the Insurer (or Network) section at all!

Many times, language that is very unfavorable to Providers is sneaked into totally unrelated provisions.

Also, it is quite common for a PIN almost always to use just a few boilerplate templates whether relevant or not. Manziel Law Offices, PLLC has, for instance, seen a case where a major Medicare and Medicaid program regional administrator had a clinical laboratory chain sign a Hospital Provider Agreement.