Private Practices

Private practices must look beyond pay rate in payor contracts

Len Strazewski , Contributing News Writer

Do you want to spend more time dealing with contract arrangements or providing care to your patients?  Contracts with payors can be complicated and loaded with details that affect how and when physicians get paid and, in some cases, how they practice medicine.

Practice sustainability toolkit

Set your private practice up for success with the latest AMA resources.

To help physicians in private practice better navigate the challenges of payor contracting, the AMA has unveiled a suite of outstanding resources.

Doctors can learn more from subject-matter experts in the AMA’s free, two-hour webinar series that guides private practice physicians through the complexities of the health-plan payment landscape. “Payor Contracting 101” and “Payor Contracting 201” cover basic contract provisions, basic legal rules governing contracts, commonly negotiated provisions, common disputes, and innovative and nontraditional opportunities.

The AMA also has developed a great new private practice toolkit on payor contracting that covers these elements:

The webinar series is taught by experts from the Chicago, Los Angeles and Denver offices of the Polsinelli law firm, and speakers included attorneys Jonathan Buck, Garrett Jackson and Ryan Morgan.

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With the types of payors proliferating and all feeling pressure to cut costs, payment models have also evolved, with new definitions, limitations and distinct contract provisions, Buck said. Variations on traditional fee for service are common and capitation models in which physicians assume greater financial risk are also increasingly prevalent.

The result has been more contractual terms and risk-sharing arrangements that restrict payment or lead to denial of coverage, Buck said. The arrangements also restrict the way physicians can pursue new patients who may or may not be covered by the restricted networks.

“Your practice—and how it is set up to navigate these benefit challenges—is something to consider,” Buck said. Many payors present their contacts as a take-it-or-leave-it proposition, but physicians should be aware that most contract provisions are negotiable. Understanding your own practice’s values and intentions can inform how you negotiate such contract provisions.

Contracts often include categories of coverage denial that extend beyond simple payment terms and can lead to conflict after services are billed. Physicians should consider their contract negotiations to extend beyond rates to include the detailed contract language that may drive conflicts and denials of coverage.

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“Recognize that negotiation of rates is not the end of the story. Providers typically negotiate rates and contract language in two separate processes. From the insurer perspective, the rates are on the paper, but the contract language will take away the rates you think you achieve,” Buck said.

“Some of these terms and denials can be negotiated to try and get some protection from the outset,” Morgan said. He advised physician practices to explore restrictions when negotiating their contracts to prepare for conflicts and attempt to modify them in their initial contracts.

Physician practices also should understand how and when contract provisions might restrict their ability to practice at the most advanced levels, using the latest treatments and technologies, Morgan said.

“If you are in a practice that has highly cutting-edge services, experimental or investigational denials are certain to come up. And so, it is something that is really important to focus on if you are going to be dealing with certain new technology—experimental and investigational denials are certain to come up,” he said, referring to off-label medication use or medical interventions not yet covered by Medicare.

It takes astute clinical judgement as well as a commitment to collaboration and solving challenging problems to succeed in independent settings that are often fluid, and the AMA offers the resources and support physicians need to both start and sustain success in private practice.   Find out more about the AMA Private Practice Physicians Section, which seeks to preserve the freedom, independence and integrity of private practice.

Also, check out the AMA guide to keeping your physician practice open during COVID-19.