At our health law firm, we assist medical practices and other healthcare providers in navigating the complex legal landscape of third-party payer contracting. The terms of these contracts can significantly influence a provider’s revenue. We provide comprehensive legal services that include negotiating and reviewing insurer health plans, PPO network agreements, PHO and IPA agreements, as well as other third-party payer-provider contracts. Our goal is to help protect your practice’s financial interests while ensuring compliance with applicable laws and regulations.
With offices in Atlanta and Augusta, our health law firm advises and represents medical practices and other healthcare providers with regard to third-party payer contracting legal issues. Certain provisions in third-party payer contracts can have a great impact on a provider’s revenue stream. Our services include:
- Negotiating and reviewing insurer health plans
- Negotiating and reviewing PPO network agreements
- Negotiating and reviewing PHO and IPA agreements
- Negotiating and reviewing third party payer-provider contracts
Payor-Provider Disputes
Disputes between providers and payers or health plans have distinct features. The provider and payer sectors share ongoing, interconnected relationships, and disputes often resurface over time. Providers and payers interact more frequently than many other parts of the healthcare industry because patients in payer plans depend on continuous care from hospitals, physicians, and other providers. Claims for payment also raise specific issues, such as physician reimbursement and treatment coding.
Payers, sometimes spelled “payors,” are health insurance companies or other entities that either pay all or part of a claim for healthcare services or manage claim payments on behalf of another organization.
This includes third parties that administer self-funded plans for plan sponsors. The term “third party payer” refers to any entity, other than the patient or healthcare provider, that reimburses and manages healthcare expenses. Third-party payers include private insurance companies, government programs such as Medicare, and employers that offer self-funded health plans. In these arrangements, the patient has an agreement with the payer to cover the cost of services provided. Healthcare providers typically enter into contracts with third-party payers to establish the terms and conditions for receiving payment for the care they deliver.
The United States’ third-party payer healthcare system compels most healthcare providers to enter into contractual relationships with health insurers and managed care organizations (MCOs).
All About Managed Care Organizations (MCOs)
“Managed care” generally refers to systems designed to reduce healthcare costs while enhancing the quality of care, and aims to achieve these objectives by offering financial incentives to physicians, other healthcare providers, and patients to select cost-effective treatment options, limit inpatient hospital stays, increase outpatient procedures, monitor utilization and high-cost cases closely, and share in healthcare costs. Managed care organizations vary in structure, components, and compensation models.
Some managed care organizations are comprised of doctors; others are a combination of doctors, other providers, and hospitals. Specific examples are Independent Practice Associations (IPA), Preferred Provider Organizations (PPO), and Physician Hospital Organizations (PHO). Generally speaking, physicians enter into contracts (directly or indirectly) with a managed care organization that requires the doctors to agree to discounted fees for their services and, in consideration for their agreement to provide services at lower rates, the managed care entity is responsible for “steering” patients to the doctors. A physician or physician practice group may contract with an IPA or PHO that, in turn, contracts with a PPO, health insurer or large employee in a relationship that will allow for a third-party “payer” (an insurer or employer health plan who pays for healthcare) to pay the provider when a “claim” is submitted for care rendered to a patient. The PPO organizes “networks” of doctors that may be included in a health insurance plan pursuant to contracts referred to as “network agreements.”
Physicians or physician groups may have more than one layer of contracts in order to participate in any particular network. A physician may also be a direct or indirect participant in one or more “networks” for purposes of obtaining additional insured patients. Another part of the “managed care” concept involves healthcare providers (e.g. doctors and hospitals) forming “alliances” that help them improve care, manage utilization and control costs. Participating in physician networks and other managed care arrangements can be very complicated and carries unique risks for physicians.
Reasons for Nonpayment/Underpayment of Claims
The firm represents healthcare providers in a wide range of disputes involving payors that refuse to pay or improperly underpay claims. Representation includes matters where payors assert various reasons for non-payment or underpayment, including:
- Contract interpretations
- Contract terminations
- Coordination of benefits involving multiple payors responsible for the same services
- DRG-related issues
- Improper deductions and recoveries
- Improper reimbursement standards
- Incorrectly loaded rates
- Lack of authorization or pre-approval for services
- Medical necessity or experimental/investigational denials
- Omitted terms in contracts
- Overlapping and complex regulatory requirements
- Payor mergers or contract terminations with third-party administrators (TPAs)
- Untimely submission of claims or appeals
Third-Party Payer Contracts
Third-party payer contracts are agreements between healthcare providers and third-party payers that establish the terms under which the provider agrees to deliver healthcare services to patients covered by the payer’s health plans. In return, the third-party payer agrees to reimburse the provider for those services based on negotiated rates and payment schedules. They will cover aspects including:
- Authorization requirements
- Billing and claims procedures
- Compliance obligations
- Covered services
- Dispute resolution
- Reimbursement rates
Experienced third-party payer attorneys should review these agreements. Contracts should define a specific timeframe within which the health plan must pay “clean claims.” Clean claims are claims submitted without any errors or other issues. However, providers should ensure that the contract specifies what constitutes a clean claim and identify any additional documentation that the plan reasonably requires. Contracts should establish the timeframe in which the health plan may return a claim as unclean. This prevents the plan from using unclean claims as a basis for delaying payment, and ensures clarity regarding how long the plan has to review any supplemental information before issuing payment.
The agreement should specify penalties for untimely payments, such as waiver of discounts or liability for full billed charges plus interest. Contracts should also state that payments are final unless the plan submits a written adjustment request within a defined period, and providers should conduct regular contract reviews to ensure compliance with applicable prompt-payment laws.
Managed Care Contracts
Managed care has introduced new challenges within the healthcare system. This has created difficulties for some physicians and providers.
While managed care contracts can greatly enlarge a healthcare provider’s patient volume, there are financial and business consequences and risks associated with managed care contracts. Before signing any managed care contract, a medical practice should obtain the assistance of a healthcare law attorney with relevant experience.
Our health law firm helps healthcare providers by reviewing, negotiating and drafting third-party payer agreements and other contracts. To assist medical practices and physicians in navigating the complexities and nuances of contracting with health plans and managed care entities, we prepared Guidelines for Physician Review of Health Plan Contracts that are published on the Medical Association of Georgia’s website.
Our health law firm’s focus is on representing medical practices, physicians and other healthcare providers. To schedule a confidential consultation, email us at info@littlehealthlaw.com.