As we approach the end of the year, many providers are in the process of negotiating renewals of their network contracts with health plans. Below are a few “best practices” ideas for providers to consider as they approach this crucial time.
Confirm Extensions in Writing. If you have agreed to extend the term of a network contract past the end of the year, the best practice is to confirm this extension in writing, either through a formal amendment to the contract, or by confirming the extension through a countersigned letter. Some states may require that extensions be in writing for them to be enforceable. Remember to specify the exact time that the contract terminates -- e.g. “midnight” or “11:59 p.m.” to avoid disputes about the application of the contract to admissions that occur on the day that the contract terminates.
Resolve Contract Language Issues that Caused Disputes. If you had disputes over the course of the year that caused payment issues, and the contract is being renewed or amended, now is the time to identify the contract provisions that may have contributed to the disputed issues and amend the provisions to fix the problem.
Analyze Performance and Data Under Risk Arrangements. Many shared savings and other risk arrangements require the health plan to provide reporting packages on a monthly or quarterly basis. If your organization’s performance under a risk arrangement has been below your expectations, and you are in renewal negotiations, you may be able to use this process to evaluate and renegotiate the metrics that determine whether you will be able to achieve a share of savings. You should also consider reviewing the quality of the data you are receiving from the health plan and the consistency of that data with the terms of your agreement. If your efforts to improve performance are hamstrung by poor or insufficient data, ask whether you have fully tapped the health plan’s available resources, and consider whether you can apply any back office or technology solutions to improve your use of existing resources.
Make Corresponding Updates to Downstream Agreements. If you amend or extend your network contract, your changes may trigger a need to update your agreements with downstream contractors and other business partners. Foregoing this step could cause inconsistency between your network contacts with health plans, and your downstream provider agreements, potentially frustrating your performance against any applicable metrics. In some cases, your downstream agreements may provide you with a unilateral right to make corresponding amendments.
Confirm Inclusion in, or exclusion from, the Provider Directory. It is not uncommon for provider directories to be inaccurate. After all of the hard work negotiating a new contract to participate in a health plan’s network, make sure you obtain one of the key benefits of network participation -- being included in the health plan’s directory as a participating provider. Conversely, if you have decided to exit a health plan’s network, you will want to confirm that you have been removed from the provider directory, so as to avoid patient confusion stemming from patients mistakenly believing they can receive in-network benefits from your providers.
Resolve Ongoing Litigation or Disputes. If you have ongoing payment issues with a health plan that have matured to a full-blown dispute, you may be able to use the end of the year renewal process to resolve the dispute by including a settlement agreement in the renewal agreement. If your dispute with the health plan includes disputes over alleged overpaid claims, resolution of such disputes should require the health plan to release its claims related to those alleged overpayments. Otherwise, a provider could reduce the amount it would accept in resolution of alleged underpayments (in order to account for the alleged overpayments), but then later be subjected to follow-on litigation for the same alleged overpayments.
Consider whether amending or renewing the contract triggers a licensing requirement. Some states like California require providers entering into risk arrangements to seek and obtain either a license or an exemption from licensure. In California, merely amending an agreement that has a risk component -- even if the amendment is not material to the risk arrangement -- can trigger the obligation to seek licensure.
