What You Should Ask Before Signing A Managed Care Contract

Which managed care contracts should you sign? Which are truly beneficial for our individual practices? Many of us sign up for every managed care contract out of a sense of fear. There is this notion that if you don’t sign up, someone else will and you will lose access to a group of patients. Then when we submit claims or request authorizations, we find out that working with certain plans is cumbersome and frustrating. By that time, it is too late. There have been many articles written about reviewing contracts from a legal perspective, but what about the practical aspects? There are several key points you should consider prior to signing on the dotted line … 1) What is the insurance company’s fee schedule? This indicates what it will pay for the services you are expected to render. On the accompanying cover letter, the company may list some representative RVS conversion factors or reimbursement amounts. Most often, they will list what they will pay for office visits. Ask for the complete fee schedule associated with your most common procedures. Ask specifically about the more expensive cost items such as surgeries. Once you sign up, you are held to the fee schedule. Also ask about the fee schedule for Durable Medical Equipment (DME), physical therapy and supplies, especially tray fees for surgeries. Is it financially worth it for you to provide orthotics for $150 or $200 if that is the insurance company’s allowable fee? If it allows in-office surgery and appears to pay well for the procedure, are you expected to provide the disposable supplies and instruments as part of that fee? Be aware that paying for instrumentation, extra staff time and hard cost supplies may result in a less than adequate compensation for the surgery. 2) What about bundled services? Most insurance companies have computer software that bundles services together. Medicare uses a program from AdminStar. There are several other versions of similar software utilized by the insurance industry. For example, there are some insurance companies that do not pay for an injection and a strapping together. Some will not initially pay for an office visit and a procedure on the same date of service. You may have to appeal. Is this an issue for your office? Be Aware Of ‘Secondary’ Plans 3) Is this plan secondary to another insurance plan? Many managed care plans are secondary to other insurance plans. More specifically, there has been a common dilemma with Medicare secondary insurance plans. For example, if Medicare approves $100 for a specific service, it will then pay 80 percent of the allowable fee or $80. The secondary insurance plan should pick up the remaining $20 (the 20 percent copayment). However, some companies are setting their fee schedule below Medicare’s allowable fees. In this example, if the secondary insurance plan’s maximum fee allowance is $80 and Medicare already paid that, then the secondary plan might claim it is not required to pay the Medicare 20 percent copayment. Then the doctor is expected to write off this balance as part of the contractual obligation. This is unfair to both the provider as well as the patient. The patient is paying a premium for services but the insurance company will probably never pay anything out since its fee schedule is purposely set so low. There is also some question if this practice forces you to violate Medicare laws since you are expected to collect the co-payment and not routinely write it off. There are efforts from organized medicine to get this changed but there are many entities involved so the process is inherently slow. Other Key Considerations 4) What is the plan’s authorization process like? Is it easy to get to the appropriate people on the telephone? Wasting time navigating through a cumbersome automated phone system and being placed on hold for long periods of time can be very frustrating to the office staff and ultimately costly for the doctor. Does the plan allow retro-authorizations and, if so, under what circumstances? How much paperwork/documentation is required? What about patients you have to see on evenings or weekends or those that drop in with urgent problems? Will those services be covered? If not, what are your options to ensure that your patients get the proper care they deserve in a timely manner. 5) Is there coverage for orthotics and routine foot care? Are there limitations to coverage for custom orthotics based upon specific diagnoses? Are they covered in your office or must you refer to an outside facility? If an outside facility makes the orthotics, what are your responsibilities in regard to adjusting the orthotics or getting a replacement device if the original pair is not correct or does not meet your quality standards? Also ask about coverage criteria for routine foot care. Does the plan follow the Medicare rules for routine care eligibility? Some secondary Medicare plans have their own set of regulations. Do you need to bill Medicare to get an official denial prior to billing the secondary insurance company for services excluded by Medicare statutes? This is an unnecessary step that ultimately cuts into your reimbursement. 6) What if things do not work out and you are unhappy with the plan? Check each contract for what the process is for withdrawing from the plan. Be aware of how much notice you have to give. Also understand what the transition process is for getting your patients transferred to another provider so you cannot be charged with patient abandonment. What are your responsibilities, both legally and ethically, if there are no other comparable providers in your geographic area? Final Notes Once you have the answered these questions, then you must decide if this particular plan is worth it. You must abide by the terms of the plan and render all care included under the contract. Refusal to render specific services covered under the contract, solely because of low reimbursements, excessive hassles in obtaining authorizations, etc., would actually be a breech of contract that could subject you to legal penalties and sanctions. Review each contract carefully. Ask other colleagues who are under contract for their impressions. You might also consider speaking with their office staff as they may be more on the front lines of dealing with the prospective insurance company. Trust your gut and make sure the plan fits your practice style before signing on. Dr. Poggio is a California Podiatric Medicine Association Liaison to the National Heritage Insurance Company and a medical consultant to HealthNet Insurance Company. He is a member of the American College of Podiatric Medical Reviewers and is board-certified by the American Board of Podiatric Medicine and the American Board of Podiatric Orthopedics.