Payer Participation Contracts: Do you know what you are signing?

Author: Lorraine Ludwigsen, CP, CPC, CPCO, CHCC, CHCO , Vice President, Operations & Compliance

Sep 10, 2021 | Compliance

When it comes to payer contracting, there are some key provisions that you must take seriously. In the past, there were only a few contract elements that were of interest to the provider or practice leadership:

  1. fee schedule with carve outs,
  2. timely payment of claims,
  3. timely filing limits, and
  4. termination clause.

This is no longer the case, and you need to read the payer contracts, renewal contracts, payer provider manual and even your annual recertification very carefully.

Contract compliance is a very large part of a health plan’s claims adjudication process. While all of the past claims processing concerns continue to exist, there are now a few more contract provisions that many providers overlook, such as the following.

Most-Favored Nation Status

“Provider represents and warrants that it has not agreed to accept from ANY OTHER PAYER, a reimbursement rate that is less than what is offered by Payer under this Agreement. If Providers offers a better reimbursement rate to any other Payer, Provider MUST provide prior written notice of such an offer to Payer and give Payer the option to accept the reduced reimbursement rate. Thereafter, at Payer’s option, Payer may accept the reduced reimbursement rate, or it may terminate the Agreement immediately upon written notice to Provider.” (“Trial Lawyers Voice Opposition to the Bill”)

Compliance Program/ Fraud Waste and Abuse- Exclusion Checks

BCBS Provider Agreement:

“3.20. Compliance Plan. Provider shall have a compliance plan that includes: (1) measures to detect, correct, and prevent fraud, waste, and abuse; and (2) written policies, procedures, and standards of conduct articulating Provider’s commitment to comply with all applicable federal and state standards; (3) the designation of a compliance officer and compliance committee accountable to senior management and responsible for high level oversight of Provider’s compliance plan; (4) effective training and education for Provider’s compliance officer and Provider’s employees, Governing Body members, and Downstream Entities, including training on FWA; (5) effective lines of communication between the compliance officer and BCBSM, and the compliance officer and Provider’s employees, Governing Body members, and Downstream Entities; (6) enforcement of standards through well-publicized disciplinary actions; (7) procedures for effective and routine internal monitoring and auditing; and (8) procedures for ensuring prompt responses to detected offenses and development of corrective action initiatives related to any evidence of fraud and misconduct. Provider agrees to complete the Fraud, Waste, and Abuse (FWA) and general compliance training modules…” “Provider shall maintain training records for a period of ten (10) years. Such records shall include attendance, topic, certificates of completion (if applicable), and test scores of any tests administered.”

UHC Provider Manual

“…we cooperate with law enforcement and regulatory agencies in the investigation to prevent fraud, waste and abuse.” “A participating provider must review federal (HHS-OIG-GSA), and state exclusion lists before hiring/contracting employees (including temporary workers and volunteers).” “Employees and/or contractors may not be excluded from participating in the federal healthcare programs. Records must be maintained for 10 years.”

Medical Necessity or Medically Necessary

“Notwithstanding anything contained herein to the contrary, Payer may retroactively deny or adjust payments to Provider if Payer subsequently determines that a service was not medically necessary despite any prior determination or authorization given by Payer with respect to such service.” (“Checklist of Key Issues for Managed Care Provider Agreements”)

Noncompliance with any of your payer contract provisions can lead to audits, claw backs, offsets, potential contract termination and could prove to be devastating to the cashflow of a practice.

Be aware of these hidden contract provisions and be vigilant, ensure your compliance.