What to Consider When Contracting With Insurers
Abstract
As you negotiate contracts with insurers, don’t hesitate to ask for what you want, and be sure to read the final document before signing.
The changes to the psychiatry CPT codes that occurred at the start of this year present an excellent reason to renegotiate any insurance contracts that you’re not entirely happy with. Even if the insurance plans provided crosswalks to accommodate the new codes for 2013, since most contracts stipulate which CPT codes will be covered by the health plan and the reimbursement for these codes, the possibility that the codes in your original contract no longer exist creates an ideal opportunity to reopen contract negotiations and perhaps improve the terms. (If instead of wanting to renegotiate, you feel you no longer want to do business with a particular insurance company, now is also a good time to affirmatively terminate your contract using the process specified in that contract.)
Keep in mind that until a contract is signed, its terms are open to negotiation. And don’t worry about what others have told you about their experiences in talking with insurers. Each contract is different—even from the same company. A contract with one physician may be written at a time and under circumstances different from those for another physician.
APA’s Practice Management HelpLine has heard from many members who didn’t like the reimbursement rates they were offered by an insurer, but felt obligated to accept the contract because the insurer covered a large percentage of their current and potential patients. HelpLine staff have also heard from members who balked at the reimbursement they were being offered, refused to sign the contract, and were surprised (and gratified) to find the insurer then offered them a higher reimbursement rate. They may not have gotten the fees they wanted on the first “no”, but they got way more than they were originally offered. Sometimes you have to be willing to say “no” more than once.
Contract Negotiation and Termination
Most health insurance companies operate as businesses, with the goal of minimizing expenses while maintaining or maximizing income and maintaining an adequate provider network for their subscribers. There is a shortage of psychiatrists willing to participate in insurance panels, so you may find that you have more leverage in negotiating a contract than you think. Remember, too, that a psychiatric practice is also a business. While your primary goal may be the successful treatment of your patients, your practice is your livelihood, and you shouldn’t hestitate to make the best deal you can. Your ability to negotiate specific contract terms is really a function of supply and demand in your geographical area and your willingness to try to achieve better terms for yourself.
Even though you may feel uncomfortable rejecting the terms an insurer is offering, you should never agree to terms that you find onerous or fees that you find unsatisfactory—at least not at first. There is no risk in indicating your unwillingness to accept the terms being offered. If you do that and find that the insurer does not proffer anything more agreeable, don’t feel embarrassed to say that you’ve changed your mind and are willing to accept the terms being offered.
If your negotiation fails to end in the terms you require and you no longer want to be part of an insurer’s network, you must follow the process laid out in the contract for terminating your relationship. Most networks require formal written notice that you will no longer be a participating provider. Failure to provide this notice and refusing to take new network patients can be considered a breach of your contract. Also, your failure to terminate your relationship formally may hinder other psychiatrists’ ability to negotiate their agreements with the insurer because the supply of available psychiatrists appears to be greater than it is. This can also create access problems for patients since the insurer will continue to claim you as a provider, and it will not add new providers because on paper its network seems adequate—even though in reality it is not.
Because many insurance companies are having trouble maintaining enough psychiatrists in their networks to meet enrollees’ needs, they may make it difficult for psychiatrists to sever their relationship. APA’s Practice Management HelpLine has received calls from members who were unable to get out of their contracts for months because an insurer maintained that it hadn’t received faxes or e-mails in which the members’ change in status was conveyed. We recommend that any notifications about a change in status with an insurer be done in writing, according to the terms set forth in the contract, and be sent by registered mail, return-receipt requested. This way you will have a record of the company’s having received your request.
Contract Terms You Need to Know
Time: Most contracts stipulate the fees that will be paid to in-network physicians for specific procedure (CPT) codes and which physicians will be paid for which CPT codes. For instance, prior to this year, some insurers reimbursed psychiatrists only for the psychiatry CPT codes, even though it was just as appropriate for psychiatrists to use the evaluation and management (E/M) codes (the 992xx series). Now that psychiatrists are required to use the E/M codes to code their medical work, it is essential that not only the codes in the psychiatry section of CPT be covered, but the E/M codes as well. The information about specific codes and their reimbursement rates is rarely found in the body of the contract you sign, but should be available in either the appendixes or attachments. Before you sign an initial contract or continue a current contract, be sure you find out which CPT codes you’re permitted to use and how much you’ll be paid for each code. Many contracts are “evergreen,” meaning they automatically renew unless you affirmatively terminate, even if an insurer unilaterally changes the rates to your detriment. | |||||
Place: Contracts should also stipulate the physician’s status with the insurer in various settings. Some contracts provide that an in-network psychiatrist is in-network at every place of service, while others may just be for a specific setting. This is an issue that has proved problematic for some APA members who practice in clinics where many forms of insurance are accepted and who also have private practices in which they do not accept insurance. If the clinic’s contract with an insurer says it covers the psychiatrist in all settings, and the psychiatrist sees a patient covered by that insurer in his or her private practice, the psychiatrist is an in-network provider and may be paid the in-network fees that were negotiated under the clinic contract. Even if the clinic’s contract with the insurer does not stipulate that all places of service are covered, a psychiatrist who wants to be considered out-of-network in another setting must notify the insurer in writing of that desire. | |||||
Products: Besides indicating which codes and places of service are covered, contracts also should indicate which specific products of the insurer are covered (that is, the HMO or PPO). Some contracts may state they are for “all products,” present and future, and those products may or may not have different fee schedules. When you sign one of these agreements, you accept all products and all future products without actually knowing the terms of the future products or the fee schedules for them. With the advent of health exchanges, this provision could pose a problem. If the insurer creates a new health exchange product, you may inadvertently become part of that network as well and will be required to accept the fee schedule. You should review your contracts to determine whether such a clause is present and how it impacts you. | |||||
Arbitration and ‘Choice of Law’: Other contract issues to watch out for are arbitration provisions and “choice of law.” Contracts often contain provisions requiring you to arbitrate a dispute. In effect, you give up your right to have a court determine the resolution. Contracts also have a “choice of law” provision; typically, the company decides to follow the law in the jurisdiction where it is located and requires that arbitration take place there rather than where you are located. You may not want to go to California to arbitrate a dispute if you practice in New York, so check that these provisions are not designed to make dispute resolution so inconvenient or expensive for you that you would be discouraged from using them. | |||||
Before You Sign a Contract
It is important that psychiatrists review and understand every aspect of a contract before signing it. This includes all attachments. Don’t automatically accept what the insurer gives you as terms. Try to negotiate. Always check with your malpractice carrier to make sure nothing in the contract conflicts with your policy. And always check with your lawyer. Each psychiatrist’s situation has its own nuances, and no one “model” contract can protect all of them equally. Don’t sign any contract until you’re sure you thoroughly understand what you’re agreeing to. ■
If you have questions about contracting, contact APA’s Practice Management HelpLine at (800) 343-4671 or [email protected].
