There are plenty of reasons why going in-network with an insurance company is a good idea—for example, it could mean more patients and/or money for your practice. That being said, going in-network does require you to sign a contract, and—as with all contracts—you best read the fine print, because there could be something hidden in those lines of convoluted copy that you wouldn’t want to agree to. Here are 10 red flags to look for when you’re contracting with insurance companies:
1. Independent Review Organization (IRO) Provisions
According to this resource from the Law Offices of Stephenson, AcQuisto, & Colman, IRO provisions “were introduced by payors to make disputing a payor’s final decision regarding the medical necessity of services rendered costly and, in many cases, difficult to overcome.” That’s because this type of language grants the payer the ability “to unilaterally determine whether and how much they pay for medical services a provider renders to patients.”
2. Unilateral Waivers of Legal Remedies
The same resource explains that unilateral waivers of all legal remedies for failure to comply with contractual obligations in a timely manner—so-called “tripwire language”—recently began popping up in contracts more regularly. And that’s unfortunate, because with payers simultaneously denying more claims and decreasing the amount of time providers have to respond to those denials, many providers who are “more concerned with rendering care to patients might be more prone to miss a deadline, for example, by untimely responding to a frivolous denial by a payor wherein many cases, the tardiness is excusable and no articulable prejudice is caused to the payor.”
3. Retrospective Review
Per the author of this HME News article, watch out for language that doesn’t limit the payer’s retrospective review timeframe. Otherwise, you may be responsible—indefinitely—for paying back money you received as a result of an error or overpayment.
4. Restrictive Termination Clauses
According to the same article, providers should ensure they can terminate a contract anytime—without cause—by giving 90 days’ notice. Do your best to avoid signing an agreement that you can only get out of within a certain number of days from the contract’s anniversary date. Otherwise, you may have to wait several months before you can break free of a problematic arrangement.
5. Assignment of Legal Fees and Costs to the Prevailing Party
This type of clause means that providers who seek legal action against the payer may be financially responsible for all associated legal fees and costs—those they incur as well as those incurred by the payer—if the legal proceedings don’t turn out favorably for the provider. According to the Law Offices of Stephenson, AcQuisto, & Colman, “This is yet another roadblock to pursuing legal action against a payor. It is a scare tactic to ward off providers from pursuing non-payments and underpayments.”
6. Proprietary Fee Schedules
According to the HME article, providers should make sure the contract requires payers to adhere to specific contracted rates provided by the provider—not a proprietary fee schedule, which can be changed at will.
7. Exclusionary Meet and Confer Provisions
Meet and confer provisions prevent providers from having professional representation—legal or otherwise—during claim dispute proceedings. Such clauses aren’t fair, and they can put providers in a pretty tough spot. This resource likens it to dealing with an IRS audit without an attorney or CPA to help: “Given the complex nature of the payor-provider relationship to begin with, it is far better to have competent legal representation that provides the outside voice of reason and vast knowledge of contract law.”
8. Silent PPO Clauses
These types of clauses give payers the option to sell your contract to other payers. According to the HME article, by signing a contract with this type of language in it, “you may be agreeing to give discounts to low volume patients or employer groups that would otherwise come to your center through another agreement at higher rates.”
9. Bundled Codes
The same article also warns providers to be wary of contracting with payers that use “Medicare specific and payer proprietary coding methodologies,” because “bundling multiple services into one code [could end up] reducing your reimbursement.”
10. Vague or Confusing Language
As you’re reading your contracts, be wary of vague or confusing language. If you have any questions about what a certain clause or section means—or, if you think it could possibly be interpreted in multiple ways—be sure to ask for clarification in writing before you sign on the dotted line. As this resource advises, when it comes to contracts, “always be a devil’s advocate.” Also, pay special attention to the address for submitting appeal letters. Many insurance companies have multiple addresses—specific ones for different plants—and some impose penalties on providers who send paperwork to the wrong address.
Looking for even more red-flag contract phrases to watch out for—phrases like “industry-accepted,” “except as otherwise indicated herein,” and “hold harmless patient member?” Check out this article.
Have you attempted to renegotiate a payer contract because it contained red-flag language? Tell us your story in the comment section below.