Issue Briefs

Access focused “Issue Briefs” on managed care hot topics, including prior authorization, credentialing, overpayments and recoupments, claims processing and payment, contract changes, and contract termination.

Issue Briefs

Medical Necessity Decisions and Appeals of Medical Necessity Denials

Key issues to consider regarding a health insurer’s initial adverse medical necessity decisions and your appeal rights:

  • What criteria does the health insurer use to determine medical necessity? To what extent are those criteria based on cost?
  • Do the medical necessity criteria comply with any definitions of “medical necessity” adopted by your state? Some states define “medical necessity” for health insurers. For more information, see the laws organized under the category “medical necessity-definition” in the Managed Care Contract Legal Database.
  • Has the health insurer adequately described how it makes medical necessity decisions? For example:
  • How quickly must the health insurer decide whether a proposed health care item or service is medically necessary?
  • If the insurer initially decides that a service is not medically necessary, how do you appeal that decision?
  • How quickly must the insurer decide the appeal?
  • Under what circumstances can you speed up the review and/or the appeal process?
  • Does the insurer’s medical necessity review and appeals processes comply with your state’s laws and federal laws?
Issue Briefs

Rental Networks

Prior to signing a managed care agreement, what issues should a you consider regarding whether third parties will be able to access your discounted rates?

  • Does the agreement state explicitly that the health insurer may lease or sell your discounts to other payers or networks?
  • Does the contract implicitly grant other payers or entities access to your discounted rates, e.g., through broad definitions of terms like “payer” or “affiliate?”
  • If access is granted, is the other payor or affiliate obligated to comply with the terms of the agreement?
  • Will you be told beforehand which other payers or networks will have access to your services and discounts? If so, can you refuse to allow that access without having your agreement terminated?
Issue Briefs

“All Products” Provisions

What questions should you consider prior to signing a managed care agreement containing an all products provision?

  • Does the all products provision identify the products in which you will be required to participate?
  • Is the provision limited to products currently offered by the health insurer, or does it require you to participate in future products?
  • Can you refuse to participate in some products, e.g., workers compensation, Medicare or Medicaid managed care products, auto or home insurance, without losing the entire contract?
  • Will each product have its own fee schedule?
Issue Briefs

Term, Termination and Nonrenewal

What issues should a medical practice consider regarding the term, termination and nonrenewal of a managed care agreement?

  • What is the agreement’s term, i.e., how long will the agreement be in effect? Will the agreement automatically renew for another term if neither party notifies the other that it wants to end the agreement?
  • Does the agreement contain a without cause termination provision? If so, how much prior notice must one party give to the other?
  • Does the agreement permit either party to terminate the agreement for cause? If so, what constitutes “cause” for you and health insurer? How much advance written notice of for cause termination must one party give to the other.  Can both parties avoid for cause termination by curing the breach during the notice period?
  • If the health insurer wants to terminate the managed care agreement, either without cause or for cause, what, if any, due process must the health insurer give you before the termination becomes effective? For example, is the health insurer obligated to give you a hearing?
Issue Briefs

Disclosure of Payment-Related Information

What payment issues should you consider prior to signing a managed care agreement?

  • Has the health insurer given you a complete and accurate fee schedule?
  • Has a health insurer disclosed the payment rules, coding edits and modifiers that it will use to determine your reimbursement?
  • If the health insurer calculates payments using a formula based on the Medicare Resource-Based Relative Value Scale (RBRVS) or a customized relative value unit (RVU) system (including any conversion factors), do you have enough information to figure out how much you will be paid under that system?
  • If you will be participating in multiple products, plans, or networks, do you know how much you will be paid for treating patients through these products, plans or networks?
  • Can the health insurer change your reimbursement after you have signed the agreement? If so, will you know beforehand? If you object, can you terminate the contract before these changes become effective?
Issue Briefs

Amendment

What should a physician look for in a managed care agreement concerning the health insurer’s ability to change key aspects of the agreement while the agreement is in force?

  • Does the agreement require the health insurer to tell you in advance that it will be changing important contractual obligations that you or it may have?
  • If so, what kind of changes does it have to tell you about? For example, will the insurer be obligated to tell you about changes that may decrease your payment rates?
  • How will you be notified? For example, will the insurer give you conspicuous written notice, or can it provide notice by posting the proposed change on a website?
  • If you object, can you stop the health insurer from making the change? If not, can you get out of the agreement before the insurer implements the change?
Issue Briefs

Claims Submissions, Processing, Payment and Remedies

What issues should a physician consider regarding claims filing and payment prior to signing a managed care agreement?

  • Has the health insurer informed you about its clean claim elements and companion guides?
  • Is there a claims filing deadline?
  • Does the agreement specify any deadlines within which health insurer has to pay clean claims?
  • What recourse will you have if the health insurer does not pay your clean claims timely? For example, if the health insurer fails to pay a clean claim within a specified deadline, will the health insurer have to pay you accrued interest on the delayed payments?
Issue Briefs

Overpayments and Recoupments

 What issues should you consider when reviewing a managed care agreement with respect to a health insurer’s ability to recover alleged overpayments?

  • Can the health insurer recoup or offset alleged overpayments from future or pending claims?
  • If the health insurer can recoup or offset, under what circumstances may it do so, e.g., when the health insurer has made a duplicate payment, or when it retroactively denies a prior authorization or patient eligibility determination?
  • Does the agreement place a time limit on the health insurer’s overpayment recovery efforts?
  • Will the health insurer tell you before it starts recouping or offsetting?
  • Will the health insurer give you specific information concerning the alleged overpayment, e.g. the specific claim(s), date(s) of service, patient(s), procedure code(s) etc. to which the alleged overpayment relates?
  • Is there a dispute resolution process through which you can challenge the alleged overpayment? Is the health insurer prohibited from recouping or offsetting during the dispute resolution process?