Managed Care Contracts Need Scrutiny

Greg Freeman, January 28, 2013

You've heard the advice before: Review those managed care contracts carefully before signing. But now that advice takes on a new urgency because of all the changes in the healthcare industry that can escalate the threats posed by contract clauses that were always problematic, and new risks are being introduced.

Any physician practice that wants to survive the coming changes, let alone thrive, must pay extra attention to managed care contract negotiations, says John Shufeldt, MD, a consultant on practice management and enhanced efficiency and CEO of Doctors Express, the first nationally franchised urgent care network. Shufeldt also is CEO of MeMD, an online physician consultation service.

Reimbursement rates are going to be tightened at the same time managed care companies and the federal government expect high quality and efficiency, Shufeldt says. This will make the contract terms more critical than ever. Contract terms that favored the managed care company but still allowed you to "get by" in past years might now have a more significant effect on your practice, he says.

"I don't believe physicians spend enough time going through managed care contracts. They are very complex, they are certainly negotiable, and they have a lot of potential pitfalls in them," Shufeldt says. "Many physicians just receive them, sign them, and send them back without really knowing what they are signing."

What's needed is not anything new in terms of strategy, but now you have to get serious about it, says Taylor Moorehead, a partner in billing operations with healthcare billing consultants Zotec Partners and also its corporate compliance officer.

"It's the basic blocking and tackling that people just weren't motivated to do enough of in the past," Moorehead says. "The reimbursement was good enough, the time to payment was good enough, and so people just took the contract and lived with it. That's not going to be the case anymore."


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