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Administrative Simplification and Fair Contracting

Physicians and practice staff spend hours each day dealing with prior authorizations, insurer contract issues, complex claim filings and other nonclinical activities, costing the practice money while doing nothing to improve patient care. The AMA is committed to reducing administrative burdens on physician practices and increasing the fairness and transparency in the contracting process with insurers.

Please contact Emily Carroll, JD, Senior Legislative Attorney, with any questions. 

Prior authorization

Health insurers are increasingly requiring prior authorizations for pharmaceuticals, durable medical equipment and medical services.  Unfortunately, the inefficiencies and lack of transparency in prior authorizations processes cost physicians and patients time and money.  In addition, the lengthy processes may have health consequences for patients when treatment is delayed.

The AMA has model legislation that aims to reduce the administrative burden prior authorizations place on practices and streamline the process to prevent delays in care.  

Fair contracting

The AMA believes that insurers should abide by fair business and contracting principles. To assist advocates in determining the best state laws related to managed care contracting, the AMA has created the National Managed Care Contract (NMCC) database. This resource is a valuable tool for physician advocates, allowing them to:

  • research existing state managed care legislation and regulations from around the country 
  • stay abreast of emerging state and federal legislation and regulatory trends 
  • support legislative and regulatory managed care reform efforts 
  • develop language and principles for managed care regulation 
  • ensure managed care organizations’ contracts and business practices comply with state laws and regulations  
  • conduct advanced legal research and support litigation against inappropriate practices of managed care organizations
  • access issue briefs that discuss key managed care contracting issues for physicians, such as medical necessity, contract termination and overpayment recovery efforts 
  • research AMA policy on specific managed care issues

Rental networks

Rental network PPOs are entities whose business practices focus on brokering physician discounted rates. The rental network PPO develops provider panel and then leases its panel and associated provider discounts to various payers. These discounts often find their way to a very broad range of entities without prior approval from the physician, and often times without any notice, robbing the physician of rightful reimbursement and corrupting the integrity of the PPO agreement.

The AMA believes the rental network PPO market must be fair and transparent and “silent PPOs” and other unauthorized entities should not be allowed to access rental network PPO contract discounts.

The ARC worked extensively with the National Conference of Insurance Legislators (NCOIL) to develop a model bill to improve transparency in the rental network market. View the related issue brief and talking points for more information.

Virtual Credit Card Payments

In recent years, many health insurers have started paying providers with payer-issued credit cards, often virtual credit cards (VCCs).  Processing these virtual credit cards comes at a significant cost to health care providers, as payments are subject to interchange and transaction fees as high as 5%, reducing the contractual amount for the provided service.  And while physicians receiving VCCs must pay additional processing costs in order to receive payments, health plans often receive cash-back incentives from credit card companies for such transactions.  Credit card companies may offer health plans up to 1.75% rebates for paying provider claims with VCCs.

The AMA has model legislation that requires transparency in VCC payments and allowing payment with VCCs only upon physician approval.

The AMA's Administrative Simplification Initiatives has additional resources on VCCs and other electronic fund transfer payments.