Make insurer settlement agreements good for long term

Contract Language. By Steven M. Harris, AMNews contributor. Nov. 13, 2006.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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If you have had any experience with insurer settlement agreements, you know this -- that just because you have an agreement doesn't mean things are actually settled.

An insurer settlement agreement is often signed by physicians and insurers to resolve litigation in regard to unpaid claims by the insurer. The agreement sets forth billing procedures and payment for all unpaid and future claims submitted.

So how does such a deal get undone? Changes in both the insurer and the practice can result in attempts to circumvent the deal, as one physician client of mine recently learned. For years, his insurer had adhered to its settlement agreement. But after that company was bought by another company, the physician noticed that he again was having problems with repeated denials and delayed payment of claims (past a 30-day window set in the deal).

This column will focus on the key contract areas that physicians should consider prior to executing a settlement agreement with an insurance carrier regarding payment terms, billing procedures and practices, releases, and successors and assigns. It also will talk about how to handle the situation if an insurer tries to wiggle out of the deal.

Payment terms. The settlement agreement my client signed specifically addressed each instance of claim denial and downcoding, and set forth review and payment provisions. In some instances, they were more favorable than the terms of the provider agreement. I also included specific language in the settlement agreement to hold the insurance company accountable for facilitating medical review of any disputed claims and timely processing of clean claims in relation to the provider agreement and state regulations. (Since the deal, my client's state has enacted a prompt-payment law, which almost all states have, requiring timely payment of "clean claims.")