Many commercial health plans’ template agreements with network providers incorporate a separate “provider manual” into the agreements. These provider manuals address a range of issues that are critical to providers, such as the circumstances under which services are considered covered benefits, the “appropriate” site for particular services, and the requirements imposed on providers for obtaining authorization and payment. Because these manuals are incorporated into the agreements, they are effectively part of the agreements, and any violation of a manual can be treated as a breach of the agreement. Complicating matters, most plan template agreements permit a plan to unilaterally revise their manuals, with the revisions having the same force and effect as the agreement. Providers seldom have any input into these revisions, and they are frequently imposed on providers with little or no notice.

When a health plan changes a policy or adds a new one in the middle of a contract term, it can significantly undermine the financial assumptions that the provider had when it entered into the agreement. Recently, many national health plans have become more aggressive with the issuance of new payment policies, and providers are feeling the effects of these policies in the revenue cycle.

When negotiating new agreements and renewals, providers may want to review the proposed agreement to determine if the plan is reserving for itself the unilateral right to change its manual. If so, providers should consider whether adding certain safeguards to the agreement would be worth discussing with the plan. One common safeguard is an advance written notice requirement, where the plan must give the provider a specified amount of notice of a manual change. More aggressive safeguards can include mandatory negotiation processes related to manual changes, binding arbitration over the cost of a manual change, and outright prohibitions on manual changes. A provider’s choice of the safeguards it proposes will likely be driven by their experience with a particular payer, and the provider’s assessment of the likelihood that the payer will introduce mid-contract changes to the provider manual that could have a material effect on the provider, the revenue cycle, and the provision of patient care.