Provisions Specific to a Managed Care Relationship

Provisions Specific to a Managed Care Relationship

As mentioned, Provider Agreement content falls into four broad categories. The first two, Introduction and Provisions Specific to a Managed Care Relationship typically contain the following sections, more or less in the order shown:

Introduction

  • Identification of Parties and Agreement. This names the parties and says they enter into the contract.

WHEREAS and WHEREFORE

  • Description of the Parties. This broadly describes what each party does, “e.g., a network that provides such-and-such types of services”, “a Hospital”, “which operates a group of behavioral health facilities”, etc.
  • Reason for Contracting. This says that Intermediary or Payor wants to contract to have Provider furnish certain types of services and Provider wants to provide those services.

Side note: Although you would think this should be Section 1, most Agreements don’t number the Identification and Whereas and Wherefore sections and therefore label Definitions as Section 1 or Article I.

Side note: Sometimes an Insurer or Network says the Agreement will cover both commercial and/or government programs and workers’ compensation, done by including a Worker’s Compensation Addendum. That is a very bad idea! State statutes regarding workers’ compensation have very different requirements. The result is like trying to make a car and a boat by bolting outboard motors to a car and caulking leaks!

Provisions Specific to a Managed Care Relationship

Section 1 – Definitions

This defines terms used in the contract. Terms commonly defined include: Administrative Guidelines, {Insurer’s Name} Affiliate (e.g. “CIGNA Affiliate”), Agreement, Benefit Plan, Billed Charges, Case Management, Clean Claim, Coinsurance, Copayment, Covered Services, Customary Charge, Deductible, Emergency Services, Enrollee, Health Plan, In-Network Services, Inpatient, Medically Necessary, Out-of-Network Services, Outpatient, Participant, Member, Member Contract, Participating Provider, Payor, Preauthorization, Precertification, Prior Authorization, Primary Care Physician, Protocols, Provider, Provider Manual, Quality Management (QM), Quality Improvement Program (QIP), Referral, Subscriber, Utilization Management (UM), Utilization Review (UR).

Side note: In an auto insurance context the abbreviation UM refers to “uninsured motorist” insurance coverage, while in a managed-care context UM stands for Utilization Management. Also in the auto insurance context, UM – for uninsured motorist – should not be confused with U I M for underinsured motorist.

Side note: Because a Provider may be contracted with various types of entities, this article sometimes uses the acronym PIN to mean “Payor / Insurer / Network – as the case may be”; that is not an industry-standard acronym.

Section 2 – Obligations of Provider

General obligations:

  • Provide specified types of services, e.g., Hospital Services, Behavioral Health Services, Laboratory Services
  • Maintain all necessary licenses and certifications
  • Maintain sufficient levels of professionals and support staff
  • Comply with medical and industry standards, not discriminate, etc.
  • Times of day Provider will be available to provide services
  • Representations that the person signing is authorized and the Provider has all necessary licenses, etc.
  • Records, confidentiality, retention, access by the Intermediary, Payor or governmental agencies
  • Maintain appropriate professional and general liability insurance or self-insurance

Credentialing:

  • Credentialing of the Provider
  • Credentialing of “sub-Providers” who will treat Members, such as resident physicians
  • In some cases (such as hospitals), credentialing of individual physicians and other healthcare providers such as physical therapists, registered nurses, physician assistants, nurse practitioners, etc., is frequently delegated to the Provider.

COB, VOB, Claims:

  • Notify PIN (Payor / Insurer / Network) of all Covered Person admissions
  • Obtain sufficient information to file adequate claims
  • Obtain information about other known or potential sources of payment for Coordination of Benefits (COB)
  • Contact PIN to confirm the patient is a Covered Person and the coverage available. (Called “verification of benefits”, VOB)
  • File claims within certain time frames. (Claims filing is often in the Provider Compensation section instead.)
  • Notify PIN of information about possible Coordination of Benefits situations

Notices and problems:

  • Post certain notices in certain areas
  • Notify PIN of all complaints by Covered Persons
  • Participate in the PIN’s Covered Persons grievance process
  • Notify PIN of certain adverse events such as a government agency citation
  • Indemnify the other contracting party under certain circumstances

Participate in PIN programs:

  • Comply with PIN policies, procedures and manuals
  • Participate in a Quality Management/Quality Improvement Program
  • Participate in Utilization Review, preauthorization, case management, prospective and retrospective review, etc.
  • Try to make referrals only to Participating Providers.

Section 3 – Obligations of Payor / Insurer / Network

Typically, the Compensation section is part of or immediately follows the Provider Obligations section although sometimes the PIN Obligations section comes first as shown here.

  • Maintain all required licenses
  • Comply with applicable laws
  • Identify Covered Persons upon Provider’s request
  • List the Provider as a Participating Provider
  • Provide Covered Persons with a listing of Participating Providers
  • Receive and process claims for payment of services
  • Payment – if the party is a Payor or Insurer, pay the claim
  • Notify the Provider of any changes
  • Indemnify the Provider under certain circumstances
  • Maintain appropriate insurance

Side note: Because PINs normally draft the Agreement, it is very common that many of these terms are not present. Often, “obligations of the Insurer” provisions basically state, “The Hospital shall . . .” Some Agreements don’t contain any PIN Obligations section!

Section 4 – Provider Compensation

  • Claims Filing (This may be in Provider Obligations instead.)
  • Payments
  • Refers to an Appendix, Addendum detailing specific amounts
  • Underpayments
  • Billing Plan Members
  • Non-covered services
  • “Hold harmless” (no balance billing)
  • Copayments, Coinsurance and Deductibles
  • Compensation amounts
  • Overpayments (refunds and recoupment)
  • Audits
  • Coordination of Benefits (multiple payors)
  • Excluded Services
  • Payment Policies
  • Changes in Rates or Coverage