How to Improve Your Healthcare Contracts
As a fellow healthcare provider, I understand how your most important role is to provide the best and most thorough health services to your patients. Yet part of maintaining the highest standards for superior healthcare also includes maintaining a healthy bottom line. A healthcare provider’s bottom line is tied directly to the contractual relationships you’ve entered into, or more importantly what contracts you’ve become a part of. The question is… are YOUR contracts contributing to or hindering your bottom line? I asked Steve Johnston, the Credentialing and Coordinating Director here at Medical Practice Success, who has worked in the industry for over 15 years to share some insights and helpful tips to answer this question. Here’s what he said...
What do your contracts say to you?
The contract is signed or is about to be signed. Now what? What types of insurance products will be coming into my clinic? HMO, PPO, Medicare, Worker’s Comp, CHIP? Does the contract include all these products or just some of them? What can I expect to be paid for the services performed for each of these products? A managed care agreement can be an “all products” agreement, that will include contractual terms and conditions for participation in each product. Additionally, each product will have distinctive provisions for a provider to comply for full payment for the health services delivered to the patients.
What am I going to get paid?
Each insurance product that is part of a managed care agreement can include a unique compensation arrangement. Compensation arrangements may include: global, proprietary fee schedule, regionally based fee schedule, or state-mandated fee schedule(s). These fee schedules can have a significant impact on your bottom line and to the success of your practice. An essential part of a profitable practice is knowing and understanding what you will be paid for the services you perform!
When am I going to be paid?
Each state has legislatively mandated time limits for payment of clean claims and associated requirements to generate a clean claim. Does the contract superficially state that payments for claims will adhere to the law? While adherence to state law is not voluntary, contractual provisions should specially provide for compliance with statutory requirements for the payment of claims. If contractual terms specify provisions other than strict adherence to the law, question not just those provisions, but the entire agreement!
I am in a contract that is not good for my business, how do I get out of it?
Know how to get out before you get into the agreement! This is one of the most essential terms of a managed care agreement. Every managed care agreement will include provisions that permit termination of all or part of the agreement. Termination may range from 90 to 180 days and even up to a full year! If an agreement is no longer beneficial to your bottom line – terminate it!
I have been offered an agreement with a managed care company, it is right for my business?
Some of the most important terms and provisions, when considering signing an agreement with any managed care company, are those that have briefly been discussed here. The crucial thing to remember is that if the contract will not enhance your business in a positive way, then don’t be afraid to walk away!