Cardiology Coding Alert
Negotiating Health Insurance Contracts
Presented by Steven M. Verno, CMBSI
Four Key Steps To Negotiating An Insurance Contract
There are some steps that I go through when I negotiate a health insurance contract. The first step I do is review the insurance contract language. I go over it line by line to see if there is anything in there that is detrimental to my provider to my practice. I look to see if there is anything that may be missing. I look to see if there is any language that needs to be changed or language that needs to be added. Then I negotiate. Once I have made the changes, I negotiate the insurance contract language with the insurance company. There is a give and take in that negotiating period. This is where I am at right now, is in the negotiating period with these insurance companies because I have already reviewed the language.
The Pros And Cons Of Having A Contract
So what is the insurance contract? Basically you are getting married to the insurance company, that is what you are doing. It is an agreement between you and them on what you are supposed to do and what they are supposed to do. This insurance contract establishes your policies, your procedures,the benefit, the length of the contract, what to do in case it needs to be terminated, what happens after it is terminated and how you are to be paid. But basically, you are getting married to the insurance company and you are doing it by virtue of a contract. So why do you need a contract? Well, many providers have a contract because it increases their revenue and it increases the patient population. You have a doctor is in family practice. He is going to sign a contract and in return the insurance company is going to send him so many patients. By doing that he is going to be increasing his revenue. One of my practices, I have several practices--I have got a pediatric practice, I have got a family practice and I have got several ER practices that I manage. My ER practice, there really is no benefit to signing a contract because the state tells the insurance company what to pay us as non-contracted providers, and patients are always going to go to the emergency room. So we do not have to worry about increasing our population, it is increasing for us. In some states it is better to not have a contract because of law that are established that regulate payment to non-contracted providers. For example, here in Florida where I am located, state law says for a non-contracted provider, the provider is entitled to the full amount of his charges. It is that simple. So, there is good and bad to having a contract.
Contract Negotiations Even Out The Playing Field For Providers
In understanding contracts, know that there are usually parts of a contract that are missing. A lot of contracts have restrictions on you the provider and a lot of them have language that is very confusing. We are going to see some of that language in a little bit. One of the things that I find when I look at the cookie cutter contracts, is if they are pro carrier and very anti-provider. They have many, many restrictions on the doctor and the intent of going through contract negotiations is to even out the playing field that is what you want to do. You want to make it so that your provider has a very good contract that is going to protect the provider down the line.
Make Sure All Definitions Conform With State Laws
When you go over the definition, read the definition, make sure it is clear, concise and it is understandable; make sure that when you look at that definition it conforms with your state laws, because once the contract is signs, state laws go out the window. Everything is based on that contract and that contract is going to be held against you if you go outside the boundaries of the contract. They are going to keep coming after you and saying you are in violation of the contract, you are in breach of the contract. So, you do not want that, you want to make sure that if there is a state law that regulates insurance contracts, read that state law and see what it says, what must be included. Sometimes the carrier will say, 'this has to be included' and you say 'well where does it say in the state law that has to be included?' So we are going to be talking about some examples about state laws.
How To Make Sure The Insurer's Version Of 'Clean Claim' Is Fair
Another definition is clean claim. You will find that in most states, most states leave the definition of a clean claim up to the insurance company. It is amazing. For those of you who have this print-out you will see this is a pretty huge definition of a clean claim, but this is going to get you in the end if you read it and you do not make changes to it, because in there it basically states that 'unless otherwise required by law or regulation, a claim which is a) submitted within the proper time frame as set forth in the agreement.' You need to look elsewhere in the agreement on what the time frame is. They may have it set up as 90 days. 'It has detailed and descriptive medical and patient data.' That is understandable not a problem with that. 'A corresponding referral (whether in paper or electronic format) if required for the applicable claim.' Well, if you do not have that referral and you submit the claim it is going to be denied. 'Whether it is submitted by electronic transaction using permitted standard codes' …quot; some do not even list standard codes, for example CPT, ICD-9 and HCPCS. I usually add that in there because I want them to conform to current standards because a lot of times they will come back and say, well our Claim Check software says that this is not included in and it is in accordance with CPT.' And I say bull, it is not. You want to make sure that it is in accordance, and it says 'in accordance with applicable permitted standard code sets, CPT, ICD-9 and HCPCS as required by federal or state regulatory authority, for example, Department of Health and Human Services, Department of Labor.' And it also says 'here or otherwise all the data elements of the UB-92 or HCFA 1500' and they usually will say, 'or successor standard forms' so that they do not have a change the word HCFA to CMS. 'It includes, but it is not limited to, member ID, social security number, date of service, complete and accurate breakdown of services and does not include coordination of benefits and has (the big one) no defect or error including any new procedures with no CPT code, experimental,' blah, blah, blah. So, you need to make sure that this is beneficial to you because when I see that 'no defect or error' how do I know that the patient did not give me any information that was incorrect? I will verify the information that I get. That is one of things that I teach in other classes. You must make sure that the information you are given is true, accurate and correct. Because if you are putting that information on the claim form and the patient gave you bad insurance information or gave you a bad address or gave you a bad policy number or gave you an invalid social security number, that means that your claim is not clean. That means your claim is going to get denied and you are at fault for submitting a non-clean claim because it is your responsibility to verify the information you submitted. So, make sure that this definition of a clean claim is beneficial to you. Take out anything is going to be derogatory, that is going to keep your claim from getting denied.
Providers Should Reserve Right To Approve Changes Before They Take Effect
Don't Let Obligation Requirements Take Physicians Beyond Their Limitations
Insurance Company Obligations Are Often Limited
Things insurers are required to do. You are going to find that some of them are very, very limited, other than making sure that their members provide you with an ID card, you can check eligibility, and that they will sell you to another insurance company that they are doing business with. For example the language: 'company or plan sponsors shall provide the following: A means for members to identify themselves to participating group physicians (in other words ID cards), an explanation of group payments (in other words an EOB), a general description of products (in other words a quick reference card).' Usually that is a list of drugs that is available. 'A list of participating physicians.' You will find that list is old and a lot of these physicians have left because they want you to refer patients to other participating physicians. So that book is definitely old, in a lot of cases. 'Timely notification of material changes in the information.' Sometimes they are only going to give you a 30-day notification.
Now claim submission and compensation and member billing. This is, like I said, the bread and butter. This is what you need to look at very, very carefully. For example, it tells you how you are paid, it tells you what you allowed to do with the member, it basically tells you if there any appeals processes that are involved, and in some cases it does not have that. But make sure that everything in this section conforms to your requirements because, again, once you sign this, this section here is very binding on you. They are going to shove it in your face if you step one ounce out of line with the insurance contract. It does not matter if they are out of line. They just going to ignore you; but you want to make sure that everything is there. For example, 'physician shall not submit a claim to company in paper form unless company fails to pay or otherwise respond to electronic claims submission in accordance with the time frames required under this agreement or applicable law or regulation.' What they are telling you is you cannot submit a paper claim. So, my question to them is, and I am putting it in red underneath: 'what about secondary claims, what we do with them because they have to be submitted on paper at the moment until we get things ironed out to start submitting these electronically because you require the paper claim. You require the paper EOB. So, my question to the carrier is what about secondary claims? What about claims that you want me to submit on paper, that you tell me you need resubmitted but you want it on paper? There are some claims that do have to go on paper. For example, if you are dealing with a procedure code that is unlisted, you have to submit that. You have to submit claims that you have to prove medical necessity by submitting the claim with the medical record. So, you need to have this type of statement re-worded to conform to current industry standards.
Assigning Legal Responsibility For The Payment Of A Claim
Another one; 'while company may pay claims on behalf of plan sponsors, group, participating group physicians and company, acknowledge that the company has no legal responsibility for the payment of such claims for covered services rendered to a plan sponsor's member provided however, the company agrees to reasonably assist group as appropriate in collecting such payments.' So in other words you may sign a contract with one of the big insurance companies …quot; I am going to use United for sake of argument. United has a lot of sub-companies, they just bought out Pacificare, they just bought Neighborhood Health Partnerships, they also own a lot of other small companies. So, using them for sake of argument, they are just basically saying 'we have got no legal responsibility for payment of the claims to you.' If I am signing an agreement with you, how come you are not taking any legal responsibility for the payment of my claim? They usually tell you, 'you have got to deal with these sub payers.' I do not deal with sub payers. I deal with them, they are who I signed the contract with. It is their responsibility to go after the sub payer and to go after the member if I am not getting paid. So, I am not going to agree to a term such as this.
Never Give Permission To Offset Payment
Another one: 'company may from time to time notify group of overpay' oh you are going to love this one; 'group of overpayments to group and group agrees to cooperate with company to secure the return of any such overpayment, or payment made in error, for example, a duplicate payment or payment for services rendered by a group physicians to a patient who is not a member within a reasonable period of time. In the event company is unable to secure the return of any such payment within such reasonable time, company reserves the right to offset such payment against other monies due.' If you agree to that, I am telling that you are going to have some problems because basically what they are saying is, 'we can go back at any time and look at your claims and if we feel that you are overpaid, we are going to get our money back, and you are agreeing to allow us to offset that.' I do not agree to any offsetting. I will specify a time frame in there. In some cases, you may have a state statute. For example, here in Florida they have only got 13 months from the date of payment to go back and review the claim if it involves eligibility. So I want to make sure that it has language in there, where it states that they can only go back per the time frame in accordance with applicable state of federal law and that I am also allowed to go back at that same time frame and do any claims review, just like they do. I want to make the playing field equal with them and I will never give them permission to offset. Never give them permission to offset.
Beware Of Pre-Approved Patient Billing
Here is another one you are going to love. 'Group may bill or charge members only in the following circumstances: The member's plan provides and/or company confirms that the services were not covered. 2) The member was advised in writing prior to the services being covered, rendered that the specific services may not be covered and the member agreed in writing to pay for such services after being so advised.' Well, first up I do not know of anybody who is going to agree in writing to be billed in the event that it is denied. I know we have to do this with Medicare. When the patient is a Medicare patient we have them sign an ABN form. If this is not Medicare, I am not going to do that. First off, I am going to ask the insurance company for a list of all the covered services. I am going to give them a list of every CPT code that I have used in the last two years. Usually that lists about 300 codes, and then I must say, 'which of these are not covered under these members' plans?' If they say they do not have a list, then I am going to have language added that 'unless otherwise specified all services provided by the physician are deemed to be covered services.' That way they cannot come back later on and say, 'this is not a covered service' because if they say we do not have such a list, how can you deny it as a non-covered service?
Contract Should Specify Consequences For Late Payment And Other Carrier Mistakes
When you are going over your contract, look for the following: Make sure that the time frames for submission of the claims and for payments of the claims are listed in your agreement. Usually, you will find that there is nothing regarding what the carrier will do when they pay your claims late. What happens? You are supposed to get your claims paid in x number of days, what happens if you do not get the payment in the time frame, or they pay you less then the contracted amount? Makes sure that the contract specifies what they are supposed to do if they pay you the lesser amount or if they send the payment to the member. Makes sure the contract lists what happens when they send payment to the member, or to an address that is not even yours. I get a ton of that on a constant basis, where they are constantly sending payments to the hospital or they are sending it to some old address that we had 20 years ago. If the carrier says 'payment was made' and you did not receive the payment, is the carrier going to charge you for copies of the canceled checks? I make sure that in the contract, I specify that if I request a copy of the cancelled check, it is for free because if they are going to want copies or things from me and it specifies they do not have to pay for it, I do not have to pay for it.
Obtain A Copy Of Policies And Procedures Before Signing
Now, another part of the contract is compliance with policies. What this section does, it tells you how you will comply with their policies and procedures. What you should be doing is any time there is a reference to the term policy and procedure, say 'we need to see a copy of it before we sign this contract.' Some of them will say 'it is online.' Well if it is online and you cannot access it online let them know that you cannot access it. But you want to go over those policies and procedures that they have got because it may conflict with what you are trying to accomplish in negotiating this insurance contract. Again, if they are listed in the contact then basically they should be included as part of the contract. I did have one insurance company and they said, 'we are not going to provide it to you until after you sign the contract.' I said, 'we are not signing the contract.' So they agreed to have the language removed where it references these policies and procedures. It was really unusual that they did that, but they did it. They did not want to give it to us and I included language that basically stated that 'this contract supercedes any policies and procedures that are not listed with this contract.' That way the contact is the one that takes precedence.
First Year Of The Contract The Should Be The 'Watching Term'
Another part of the contract is term and termination. In other words, how long the contract is going to last and what to do in case you need to terminate the contract. Many contracts are basically for either a year or two years and they automatically renew. The term used for automatic renewal is 'evergreen'. They would like to see it automatically renew each year, until either side terminates. My contracts are for one year and one year only. I do allow them to evergreen in certain circumstances because what I tell the carrier is basically, 'for the next nine months, once we sign this contract, I am keeping an eye on you. If you are going to play the same games you have been playing all along with my claims and my payments, in nine months, I am going to give you basically a three months' notice letting you know what you have been doing, here are the claims that still remain unpaid, here are the claims that have been incorrectly paid, here are the claims where you denied incorrectly. I want these fixed; if you cannot fix them in 90 days that means we are terminating the contract at the end of one year and we are not going to renew it.' So, this is why I give that first year of marriages is the 'watching term', where I am going to keep an eye on the insurance company, and if they do not do what they say they were supposed to do per the terms of the contract, no sense carrying it on. Why have it for two years?
Do Not Allow Anything To Survive Termination
Plain and simple, what I usually do is I have to say, either party may terminate without cause by providing a notice to the other in accordance with the time frame under applicable state law. Because you will find that your state law basically allows you to terminate a contract without cause and it gives you a time frame in which to submit the termination. So look at your state law to see what it says about that, but that is what I do. I would have this whole part changed.
Never Agree To Indemnify Or 'Hold Harmless' Clauses
Another relationship of the parties, here at term that I see a lot. 'Groups agrees to indemnify and hold harmless the company from any in all claims, liabilities, and third party that causes of action arising out of the participating group physicians provision of care to members.' Do not ever agree to hold harmless clauses or indemnification. Now there are some state laws that require you to indemnify the patient because of the actions of the insurance company. That is fine. If state law requires you to indemnify the patient because of the action of the insurance company that is fine, you have to do that, that is state law. We have that here in Florida with our HMO patients. But under no circumstances will I indemnify or hold harmless the insurance company. If they make a mistake they are going to pay for the mistake because if I make a mistake, they are going to make me and my doctors pay for their mistakes. So let them know that you do not agree to any hold harmless or indemnification clauses. You have the right to seek resolution through an arbitrator. You have the right to seek resolution in court, if you have to go that far and you do not want to give up your rights because if you agreed to this, you have given up your right to that.
The Insurance Company Should Not Dictate Arbitration Process
The one thing you also want to look for in there is what the insurance company has decided to add as far as what they require for arbitration. In other words, they are saying 14 calendar days before the hearing you will exchange and provide to the arbitrator a list of witnesses, so on and so forth. Well, this is not a requirement of arbitration--do not have it in there, do not have the insurance company dictate to you how arbitration is going to go. The last statement: 'the arbitrator may award only monetary damages in accordance with this agreement.' What there are basically stating, 'we can go to arbitration to try to resolve this dispute but we are going to tell the arbitrator what he or she cannot do.' No, no, no, do not agree to that. You have got to have anything removed where the insurance company is dictating to you what is going to happen through arbitration.
Make Sure There Are Exceptions To Timely Filing Limits
Timely filings limits. Look in your contract to see if you have any of these, because these are going to be a killer to you. Check your state law to make sure that your state law has timely filing limits. For example, here in Florida we have 180 days from the date of service and from the date that the patient provides us with correct insurance information, which is beautiful. But there are exceptions to the rule that I usually add to my contract; one thing--'not on file'. I submit my claim, I call the insurance company a couple of weeks later and they say that the claims are not on file. I resubmit the claim, I wait, they say again it is not on file. Somehow or another, the one that gets there is the one that gets there after their timely filing limit. I basically state if I have submitted my claim on time and they state the claims is not on file and I resubmit it, and it ends up being denied for timely filing, if I submit proof that I submitted it in a timely manner--and proof is what I submit, not what they are willing to accept--then they have to pay my claim. If they received it and I get conformation that they received it and then later on, they say it is not on file as long as I have that conformation--let's say from my clearinghouse, that shows that they received it--and all of a sudden I check on this status and they say it is not on file, I have this added in there as a clause, that they are required to pay my claim.
Create A Safety Net For Patients That Provide Insurance After The Time Limit
I know you have all experienced this where the patient came in, did not give you any insurance information, and then all of a sudden you wait and wait, and you send the bill and send the bill, and all of a sudden now after that time limit is up, they say, 'Oh, by the way I have got insurance.' And then you bill it and then they deny it. Make sure that this is added to your clause that if the patient did not provide you with insurance information in a timely manner, in accordance with the time frame that is in there, then you can submit the claim and they pay it. If they deny it, the patient pays the bill, it is that sample. If the patient gives incorrect insurance information, they tell you to bill Aetna and in reality they have United Health Care. Well you bill Aetna, Aetna paid you the claim and now a year later, Aetna wants their money back and says, 'by the way United Health Care is their insurance.' Well you bill United Health Care; you have got a contract with United Health Care. You have got 180-day time limit and they say, 'no, time is up.' Well that is when you say, 'excuse me, but we had to bill this other insurance company, the patient gave us bad insurance information. The other insurance company verified that benefits were available, therefore you have to pay the claim.' Or, if the carrier demands a refund--let's say 11 months later, 12 months later, 2 years later or 3 years later, by putting these exceptions to the rule in there you will be covered under every situation in the event you have these problems with your claims, and with your patients giving bad insurance information. I hold the insurance company to putting these in, and if they say, 'we are not going to have these in,' that is when I say, 'okay there is not going to be a contract because I have to have these in. I am not going to be playing these games with your members and with you, here on out once I sign the contract.'
Include A Claim Payment Time Limit For Coordination Of Benefit Claims
Coordination of benefits. This is a big part of the contract that really messes people up because they will basically say you are responsible for coordinating benefits. In reality it is not your responsibility. I want to see their policy regarding coordination of benefits. I usually establish a claim payment time limit for coordination of benefit claims. Usually it is 45 days from the day I submit my claim because I put in the language, 'it is not my job to coordinate benefits. This is an issue between them and the patients primary insurance company. The provider does not get involved with COB issues.' Therefore if I submit my claim and it is involved with a COB issue, then they still have to pay my claim in 45 days. It is not going to sit and rot forever while the two insurance companies go back and forth. I require the carrier to abide by the National Association of Insurance Commissioners rules. In other words an example of that is where you submit the claim to the primary. It is $100 claim, the primary allows $80 they pay you $80, you have got $20 remaining. You submit it to the secondary. The secondary says we do not pay anymore than the primary. Well that is wrong, that is not in accordance with the National Association Of Insurance Commissioners rules. You submitted your claim for $20. That $20 is within that $80 allowable of the secondary; they are required to pay you your 20 bucks. That is why I required them to abide by the NAIC rules and I put that as a statement in my contract.
Do Not Give Discounts If You Have To Chase The Patient
Now, one other thing that I started to do also since I did this slide presentation is, when I give a discount, I have language added to my contracts now, because if I give a discount I expect my claim to be paid per according to that discount. In other words, if my changes are $100 and I agreed to get paid $80. I am expecting to get paid $80. If they apply that $80 to the patients deductible, I have language added that specifies that if the patient does not pay me that deductible, then I contact the insurance company. The insurance company is required to contact the member and inform the member of their contractual responsibility to pay that $80. That is what I require them to do. If the patient does not pay me the $80 and I send the account to my collection agency then that discount is null and void. The patient has to pay 100% of my charges and what I tell the insurance company is, 'I have to expend additional administrative cost to try to collect this. I am not going to take a discount and then lose additional money because their member refuses to abide by their contract; and I am going lose additional money by sending it to my collection agency. So if my charge I $100, I gave them the $80 discount, and I have got to send it to collections, that patient is paying $100.' That is what I have added to my contacts now. I did not get a chance to add it to the slides but put that in your contract and tell the insurance company this is what you expect. You will not give discounts if you have to try to chase the patient. Not only that but we also tell the insurance company that if this is going to keep happening, we going to come back to the table and I am going to demand more money. I am not going to give a 20% discount. I am going to give a 10% discount to try to make up for my losses and if they do not want to agree with that then I terminate, it is that simple.
Watch Out For Attachments That Are Missing Or Blank
Look to see of these are any paragraphs that make references to these. If you go to that section, see what it says. If you disagree, make your suggested changes but never agree to any attachments that are missing or blank. And again be careful when they say, 'Oh, we will give it to you.' That is like buying a car without looking at it. You are going in and you say, 'I want to buy a Saturn.' They say: 'no problem, sir just sign the contract.' 'Well I want to look at the car.' 'Well we will let you look at the car after you sign the agreement.' 'No I want to look at it. I want get it now, I want to test drive.' 'Sorry sir but you have got to sign the contract.' That is when I would walk away from that. And if they say, 'we are not going to give it to you until after you sign, it is warning sign.' Just walk away from the agreement table and say, 'look when you give this to me, we will come back to the table.' You always have the ability to walk away. Remember once you sign it you are married. You have agreed to a contract that is binding.
How To Negotiate Insurance Language
Some of the little things that I do is, there are things that I ask to be taken out that I know should not be taken out because state law requires it. For example, where it asks me to hold and indemnify the patient, I'll say, 'I want this removed and I do not agree to any hold harmless clauses.' I know it has to be in, but my little trick is, when they come up to me and they say, 'this has to be in' quot; I will pause for a little bit and I'll say, 'okay we will go ahead and we will put that back in.' It is showing that I am willing to make changes but in reality, I do not have to. I know what had to be in there but this is showing good faith on my part to put things back into the contract. And then when we start coming up to something that I want out that I know should be out, I'll say, 'look, you want me to have things put in, why do not you have stuff taken out?' So it works that way and this is an excellent technique that I use and it helps. Let's say they say, 'this has to be in the contract in accordance with the law.' Ask them to show you the law. They should be able to do that, I have one that does no problem at all. And if I see that the law says it has to be in then I'll put back in. But if they refuse to show you then walk away from the negotiation. You can always walk away and then come back to the table again that is the magic about why you are negotiating.
Know Your Expenses Before Agreeing To Any Reimbursement Amount
Now the next big things is once you negotiated the language, at the same time negotiate your reimbursement amount. This is the other big thing right here, negotiating your reimbursement amount. Before you agree to any reimbursement you need to know your bottom-line. A lot of practices do not know their bottom line. They do not consider their bottom line. They just sign the contract. I am going to get so many patients, I am going to get paid this amount of money, and that is it. They want you to take a deep discount. Make sure that the discount does not ruin your practice like it did with this one doctor. Look at all you expenses, look at your rent, your payroll, including the provider salary. Look at the benefits that you are giving to your staff. This includes bonuses at the end of the year if you get a nice bonus. Look at how much you are paying for health insurance, workers comps, and equipment rental, all the way down the line to office medial supplies. That will give you a head start of what your bottom line is going to be: look at all your expenses.
How To Calculate The Bottom Line
For example, you are a small practice, one physician. One patient per hour, 8 hours a day, five days a week, four weeks--that is 160 patients per month. Now I know you are going to ask me, why only one patient an hour? Well, the way I look at it is, insurance companies usually do not pay you 100% of your charges. Medicare usually is 26%, Medicaid is 17 %. Thirty percent of your claims areusually going to be paid. The rest are going to be either denied or tied up in appeals. That is a given. And you are going to have self-pay patients, and unless you collect self-pay up front, most of your self-pay patients do not pay. You are going to end up billing them, billing them and billing them and sending them to collections. It pays to have your self-pay patients pay at the time of service. Some places say, 'we cannot do that.' For example the emergency room cannot do that. So this is why you want to establish one patient per hour as your bottom minimum line.
Know What The Insurance Company Actually Pays You
So, know how many patients you see in a set period. Now, let us say for example from 11/20/04 to 12/31/05 you treated 850 patients from insurance X; during the same time period you treated 5,000 patients. This mean 17% of your patients are with this insurance company. Now 17 is a lot, so you have got to say to yourself, if I sign a contract, if I lose these 17% of my patients--is this is going to hurt me? This is one of the things you have to decide because a lot of people say, 'I do not want to terminate my contract because this is a lot of my business.' Well you need also make the decision if they are playing games with you and they are not paying you what you are supposed to be paid, maybe it is better to get rid of this insurance company. You may still keep these same patients, but you may be better off.
Know How Much The Insurance Company Pays Their Top Executives
Remember I said, know your enemy. With your larger insurance companies, go to the securities and exchange commission to review the insurance companies filings. You want to look for a DEF-14 A form and this form will tell you almost everything you want to know about the carrier. You can go to www.sec.gov, you can type in Aetna when you want to search for a companies filings. You will see on the left hand side, about the second one down then you just simply look for the DEF-14 A form. For example, I am going to use United Health Group. This is common knowledge; it is public knowledge, so I can put it on my slide. It tells you where they located, for example: 9900 Bren Road East, Minnetonka, Minnesota. That is where United Health Care has its corporate office. It will tell you who the CEO is. In this case it is Dr. William McGuire. His salary is $2,176,923. He gets a bonus every year of $5,550,000. He received a performance bonus of $1,897,000, $123,000,000 in stock options. In addition, for the use of the company provided transportation he gets a $147,000. He gets an expense allowance of $21,600. He is reimbursed for his financial planning and assistance fees at $66,245. He also gets company paid disability insurance premiums of $91,000; company paid life insurance premiums of $30,865, plus they pay for memberships in the country clubs of his choice. Use of the chartered company jet and he also gets free medical care. He does not have to pay for it. So when I am going up against the insurance company I show them these numbers and I say why should my doctor take less so your guy can make all this money? Plain is simple. That is usually where I win out. I should not allow my doctor to pay to make this fat cat richer. By knowing what you know about the insurance company, it helps you get a higher reimbursement. It is that simple. So if they can pay their CEO this amount why should I take an amount that is less than my bottom line. I am not going to lose money by paying what they want to pay me. I show them these amounts and I show how this guy is making so much money. The way they do it, they increase premiums, so you and I are paying higher premiums and they reimburse the doctor less. That is where they are making the money. It is that simple.
Get A Settlement Of Any Outstanding Claims
Before you sign any contract, get the settlement. This is the secret. You want to make sure you get a settlement of any outstanding claims that you have and you let them know, we do not sign a contract unless you settle all of my outstanding claims. It is as simple as that. You do not leave anything on the table in their system unpaid. So this is what I want to do. I do a spreadsheet and I give them a spreadsheet of all my outstanding claims. Then I allow them to make me a reasonable offer. I know I am not going to get a 100% but I'm going to give them a chance to make me a reasonable offer to settle. And usually I will get a decent settlement off of it, and once I reach a settlement, they are going to create a settlement agreement. You need to go over that settlement agreement with a fine tooth comb to make sure that there is no language that they are adding in there and that is going to be detrimental to you. One of the things that I require in the settlement agreement is, I do not allow them to do take-backs, once the settlement is reached. You have to have this put in there, otherwise they can come back and do take-backs. One contract we just signed a couple of months ago. No sooner did we sign the agreement; they went back to 2001 and did a research of all claims from 2001 and took the money back. This was in violation of the contract and settlement agreement. We let them know that immediately and if they did not fix this problem within five days that the whole contact and settlement was going to be terminated and we were going to go back to court and sue them. And they fixed the problem, they apologized and they gave us our money back.
Don't Rush Through Contract Negotiations
Some final words that I want to let you know, for we are almost done here. When you negotiate with an insurance company, take your time. There is not a rush. Again, you are getting married to this insurance company. It could take up to a year or more to negotiate an insurance company that is beneficial for both sides. I am still negotiating a year later with one insurance company. We meet every Friday on the phone, we talk about the language, we talk about a reimbursement offer. This one insurance company said we do not settle claims for non-contracted providers. I said no problem, we will bill every member for every outstanding claim that we have right now and we will stop sending you claims. We are not required to send you a claim because we not contracted. You want to treat us that way as a non-contracted provider, I will treat you the same. I will collect from the member and then once your member pays the claim, we will give your member a claim form to submit and that is when they changed their mind. And I just got a report on Friday of all the claims that they just went back and looked and agreed to settle on. So they did agree to settle.
Thank you Mr. Verno. Ladies and gentlemen I would like to remind you that this portion of the teleconference is also being recorded. If you have a question at this time please press *1 on your digital telephone. If you question has been answered or you wish to remove yourself from the queue please press #. Please limit your self to one question at a time so that everyone may have a chance to participate. If you have another question you may reenter the queue by pressing *1.
Q & A Session:
Our first question comes from the Nicole Bartley of the Coding Institute. Please state your question.
Question (NB): I actually have several questions right now and the first one, I'll just go through them one by one. The first one says what do you think about negotiating a contract that includes 'usual and customary' language.
We will go to Rhonda Bennet with CEI, please state you question.
Question (RB): Hi, our first question is, we have had a payer specifically state that they will not allow a consultant to come to the table in representation of a physician. Have you ever had that told to you?
Our next question comes from the Nicole Bartley, please state your question.
Question (NB): Hi Steve, this question asks, lately I have been asked to supply implant invoices before the payer will reimburse me. Why are they asking for this? Some are denying the charges on the implants until I supply this information.
At this time there are no further questions. I would like to turn it back to Mr. Verno for any closing comments he may have.
This is the conclusion of Negotiate Insurance Contracts with Confidence - and Come Away a Winner, national teleconference. We hope you enjoyed this session. Please complete your teleconference evaluation form and return it to the Coding Institute at the address listed on the form. Mr. Verno, the Coding Institute I would like to thank you for your attendance. To end this call, simply hang up your phone.
Thank you, operator, welcome everybody to 'negotiating health insurance contracts.' Let me start out by saying 1) I am not an attorney. I am a practice manager and I am a medical biller and a medical coder and one of things that I do, on a day-to-day basis, is negotiate health insurance contracts from my practices. I am currently involved with six insurance contract negotiations right now. I have been doing these for the last several months with these same insurance companies. So, this is not something that is going to take place overnight or you are not going to get done within a week. It is going to take months and in some cases maybe up to a year to negotiate a good health insurance contract. But I just want to let you know, I am not an attorney, I am just like you.
Once you have negotiated the insurance contract language then the next big step is determining and negotiating your reimbursement amount, because this is what you want to be paid once the contract is signed. If you negotiate a low reimbursement amount, your practice is going to have a lot of headaches. Your doctors are going to say, 'how come I am not making any money and I have got a contract?' If you have got a decent reimbursement amount and they are paying you that reimbursement amount then everything is going to go okay. 'I have got some that I negotiated two years ago. I do not have to go back to that insurance company--they are paying me the decent amount. I do not have to constantly go back and say why are not you are paying me, how come we are having these problems.'
And the last step--the big secret is determining and negotiating your outstanding claims because even though a lot of doctors sign a new contract they forget about the claims that they currently have in the system that remain unpaid or remained incorrectly paid. So, that is the big key, the final step in negotiating your insurance contact. These are the four steps, and I am going to take you through these four steps that I use. I am going to include some true insurance language, so you can see how ridiculous some of these contracts are.
So, the first step we are going to do is review the insurance contract language. Just as a reminder, this is normally a three hours seminar that I give. I have knocked it down to 90 minutes because that is all the time we have. In the three hours we actually go over the insurance contract line by line so that you get to see everything that is in a normal contract. All I do is take out the name of the insurance company. I usually pick the worst one and that is what we go over.
Now, the parts of a contract that you are going to be looking at, you are going to look at definitions, usually that are in the front. In some cases have it as an attachment. You are going to look at physician obligations--what you required to do as the physician in submitting your claims, treating patients so on and so forth. It has insurance company obligations, but you are going to find they have very few obligations in this. It should have a part about claim submission, compensation and member billing, they all have that. That is the bread and butter right there and that is the one thing that you need to concentrate intensely on, is claim submission, compensation and member billing. Then, compliance with policies, term and termination, if you want to terminate the contract and how long the contract is going to go for; the relationships of the parties, that is between you and the insurance company, any dispute resolution that is important right there because in some cases some contract take away your right to sue in court. Then, you have a miscellaneous section, which has additions that are not part of the regular contract and then you usually have attachments or addendums. We are going to go over some of these right here, as far as definitions are concerned.
Make sure if the definition references a part of the contract go to that part of the contract to see if it is even there. I have had definitions refer me to an appendix and I have looked and the appendix is not even there in the contract. So, I want to make sure that the definitions are there and they are beneficial to me and the carrier.
Here are some examples that came from one of the insurance contracts that I have. The definition of an affiliate: any corporation, partnership, or other legal entity including any plan directly or indirectly owned or controlled, or which owns or controls, or which is under common ownership or control with the company. What I usually tell the insurance company is you have got these affiliates which you are making part of my contract. I want to have a list of these affiliates. If you can give me a list of the affiliates, then they are not going to be a part of my contract, because I do not want to cooperate with what is known as a silent PPO, which is where I sign a contract with this insurance company, they are going to sell my contract to another insurance company who has a contract with another insurance company, who has contract with another insurance company. The next thing you know you are getting an EOB that has got your discount added to it and you do not even have a contract with this insurance company. So, make sure that if they have affiliates, it is listed as an attachment and it specifically states in your contract that only those affiliates that are listed in the attachment are included in the contract, and they are not allowed to add any affiliates without your written permission. So, I usually add that additional language to this definition, that way I protect myself down the line.
Another definition example, 'material change.' I love this one. 'Any change in policies that could be reasonably be expected in companies determination' …quot; In other words, in their determination--'to have a material adverse impact on physician's reimbursement, physician services or administration of physicians practices.' So what this means is, they can make any change they feel like making in their own determination. So, what I usually put down is, in bold and underlined, 'any material changes must be approved by provider in writing before the change is effective.' Because I do not want them making a change and all of a sudden I am submitting my claims and something is being denied, and they say, 'we have a change that we made two months ago or six moths ago,' and they did not notify you. I want to make sure that I get these changes, I look at them and I approve him in writing before this change takes effect. Usually you find that they will agree to that. The ones that do not agree to it, walk away from the negotiations. 'I am sorry but this is where we have got to end. If you are not willing to make any change to this then there is no need for us to go forward.' Or, go back and talk to your legal department and talk to whoever has the ability to make any changes to see if they agree with this.
Physician obligation is another aspect. There are a lot more definitions that are in here. But what you need to do is go over the definitions to make sure that the definition is in accordance with any state or applicable federal laws and make sure that there is nothing that is going to be detrimental to you the physician. Physician obligation, this is what tells you what you are responsible for doing. Go over this line-by-line, read each paragraph completely and see what you are agreeing to. Make sure that each requirement does not take you beyond your limitation. For example, as an ER physician in my practice, some of the things that they require us to do is well baby care. They require us to involve ourselves with the treatment of a woman going through her entire pregnancy. There are things that they require, to put signs up in the hospital, and we have no control over doing that. So, make sure that it does not take you beyond your limitation or requires you to perform a task that could be in violation of state or federal law, for example, they require us to get permission from the patient ahead of time and inform the patient that it is a non-covered service. Well, you cannot do that with emergency care. You can do that if you are dealing with ambulatory surgical care or you doing that with family practice or dermatology or something like that, where it is not an emergency and you have the ability to go up to the patient and say look, this may not be covered under your health plan, you need to sign this document that if it is denied you are going to be billed for this. So understand your obligations.
For example, 'provision of services: Physician shall provide to members those covered services, which are within the scope of the respective participating group physician license and certification to practice …quot; in other words, physician services …quot; except as required under this Florida statute,' which is emergency care. 'Participating group physicians may not provide any covered services to members unless and until participating group physicians have been fully credentialed and approved by the applicable peer review committee.' What they are basically stating here is, If I am providing care to their members I cannot do that until I have been approved by their credentialing committee, which can take up to six months to do. So what does that mean? If one of their patients comes in to see my doctor and my doctor treats it, I am not going to get paid for those services. I have got to wait for six months until they put me in. So I am going to want to change this provision to basically remove that bottom part, that says 'until that they have been fully credentialed.' So I want to make changes to this. I am not going to have anything that is going to have me wait for my payment.
Another one: group physician obligation, group insurances. Basically what it says on this slide is they are requiring my practice to have $1,000,000/$3,000,000 annual aggregate for professional liability and $1,000,000 and $3,000,000 for general liability insurance. Basically, we agreed to provide the company with at least 30 days advance notice of any reasonable practice or any cancellation of material modifications of the policies. So basically what I want to do is I want to change this one slide as far as group insurance is concerned. Because if my state does not require me to have $1,000,000/$3,000,000 why should I have to carry $1000,000/$3000,000? What I am going to do is eliminate the language and simply put in here where it has 'required from time to time by company but in no event less than…' I am going to remove the rest of that paragraph and put in 'an amount as required by applicable state or federal law.' By doing that, the law can change every year, the law may say all I have to do is have a $100,000/$300,000 and that is all I need to carry. I do not have to carry this extra large amount, which is going to cost my practice more money. So, by putting in the term 'as per applicable state and federal law,' you are covering yourself. And usually I get them to remove this, because these amounts are becoming outdated.
Do Not Allow Your Agreement To Be Sold To Another Insurance Company
Another one for physician obligation, another thing it says: 'Nothing herein shall require that company identify, designate or include group and participating group physicians as a preferred participant in any plan, specialty down the line,' and then it also basically lets them sell my practice or sell my compensation to other insurance companies. Well, I am not going to allow them to do that. I am going to simply give my discount to only those carriers that are listed as part of my agreement and anything that I agree to in writing after that. I have had some, where I have actually had to tell the insurance company, excuse me, but this one particular carrier that you are adding to my contract, I cannot have in there because I cancelled my contract with them several years ago or they are owned by another insurance company that I am not signing a contract with. So, I will have those particular ones carved out but I am not going to allow them to sell my agreement to another insurance company, plain and simple.
That is actually the slide right here: 'company may sell, lease or transfer or otherwise convey to payers, which do not compete' blah, blah, blah. I do not allow them to do that. If they have a new insurance company coming in, I want to make sure that that new insurance company is approved by me in writing and it is added as an attachment to my contract. So these are the physician obligations, you need to look at very ,very carefully to see what they are going to do to you. They may have some things that are hidden in there. You want to make sure that you do not agree to something that is going to hurt you down the line.
They will provide you with the means to check eligibility. A lot them are going online now, which I do like. In some cases if you not contracted, they are not going to give you the ability to check online. I tried to explain to them it is their benefit to get me to check online. Otherwise, if I am non-contracted I am not submitting the claim. The members are going to have to pay me the full amount of my charges and the member is going to submit it. So this is an example out of a contract that basically states what they are allowed to do.
Claims Submission Policies Need To Conform To Current Industry Standards
Here is another one. 'Physician agrees that the company or applicable plan sponsor will not be obligated to make payments for billings received more than 90 days from the date of service or the date of receipt of the primary payer's explanation of benefits when company is secondary.' So what they are telling you is they do not have to pay for any claim that they received more then 90 days from the date of service or date of receipt of the EOB where they are secondary. Well if your state law says that you have got 180 days, why agree to a 90-day? There are usually some exceptions to the rule, which I am going to talk about in a little bit here, that you need to have added to the contract. So, when it says '90 days,' do not just agree to that. Look at your state laws to see if state law has something different and get the state law to conform to that.
We had a circumstance just recently where this carrier came back a year later; they sent the refund request to the wrong address, by the time we got it, it was 18 months later. It took six moths to get to us. They said that they retroactively denied the claim. So, they also said the patient had other insurance. Well, we contacted the patient, the patient says, 'yes, I have got this other insurance.' So we called the other insurance, they said 'yes, he has got insurance,' so we billed it. They denied it by stating that the patient has got insurance, but 'on that date the service he was not covered.' So, he was covered by the other insurance, which did a retroactive denial. So, you can see what kind of a pain this is, but the first insurance company denied it and then they sent us to their collection agency. So, now we have denied it to the collection agency, saying no, this insurance company is responsible. So never allow them to offset. That is the key thing I want you to understand.
Another one, a group agrees to, you are going to love this, 'to permit rebundling to the primary procedure those services considered part of, incidental to, or inclusive of the primary procedure and allow company to make other adjustments for inappropriate billing or coding. For example duplicative procedures or claim submissions, mutually exclusive procedures, gender procedure, mismatch age, procedure mismatch.' Now some of these are not a problem, for example, the mutually exclusive, if it is in accordance with CCI edits because I want to add the word in accordance with applicable AMA, CPT coding guidelines and CMS, CCI edit standards. Because if I can add that in there, then I do not have to go by their own internal coding guidelines; but as far as where it is incidental or inclusive of quot; if it is not according to CCI edits, and a lot of them will say, 'we are denying this because the EKG is included with the E/M.' Well an EKG is not included with an E/M. I have got two letters for the AMA that says that is not included. So the carriers are going to come back and say, 'well according to our edits it is, and you agreed to it, therefore you have to accept it.' Well if I agreed to it, now, I have got to accept it, but if I do not agree to it, then I change this language so that it specifically states 'per AMA, CPT coding guidelines and per CMS, CCI edits'--then I have got them. It is that simple. So make sure that you got these changes to reflect current standards.
Number two; I will never agree to have the member approve in writing ahead of time that we can bill them, no way Jose. If it is a non-covered service I am going to bill the member. There is not a law in the United States that prevents a provider from billing a member for non-covered services, and you do not need the member's permission but if you agree to this that is fine. You have agreed and you got to get the member's permission to bill them because it is in your contract now.
If you are paid less than what you are entitled to be paid, does the carrier play the game of having you resubmit the claim for the payment of the balance? One insurance company does that, they will pay you a little bit and they say you have to submit another claim for the rest of the balance. I do not play that game. When you have time frames involved in your contract, make sure that they are accordance with your state or federal laws. Do not accept their time frames, because a lot of times you will find the state laws are very beneficial to you.
Now, for example, here is the language that you may see in the contract: 'group and participating group physicians agree to accept and comply with policies of which group knows or, (I hate this term) reasonably should have known. For example, clinical policy bulletins or other policies made available to group and participating groups generally including, but not limited to those set forth in section 4.1.3. Company may at anytime modify policies.' I would get that 'reasonably should have known' removed because there is no such thing as 'reasonably should have known,' especially when you have some of these companies that have got policies and procedures that can take up a box car. I removed language that says 'company may at any time modify policies.' I either want that removed or I have it changed to specify that 'any changes must be approved in writing prior to taking affect,' and they have to be approved in writing by you, the physician. So make sure that you have that in there, otherwise they are going to make policies and procedures changes, you are not going to know it, the next thing you know, you are going to wonder why you are not making any money because now your claims are being denied, your claims payments are being reduced. And they say 'well, it is part of our policy here.'
Physician Should Have Access To Insurer's Financial Records
Here is another one: 'company, plan sponsors, and federal state and local governmental authorities having jurisdiction upon request shall have access to all books, all records and other papers (including, but not limited to medical and financial records) and information relating to this agreement until those services rendered by participating group physicians to members (in other words “records”). If you are a hospital-based physician group, usually what I will have in there, I will have language added basically saying that 'this does not pertain to us.' Or I have them remove that or I have them state that any request for this information must be referred to the hospital because we do not retain this. Now, if you are your own individual physician practice, then if you want to agree to this, that is fine. Because as far as the federal government is concerned, the Department of Health and Human Services has the right to come in and take a look at your books and records. But you may also want to add language to state that you are allowed to come in and take a look at their books, their records and their papers and information relating to financial records with them. Make it on an equal playing fields, so that you are allowed to go in as well.
The next one: 'each party agrees that (I love this) the proprietary information of the other party is the exclusive property of such party and that each party has no right, title or interest in the same.' Basically, it talks about proprietorship. With a lot of contracts it is one way. It basically requires you to agree that their information is proprietary and that your information is not. This was language I had changed basically stating 'each party' agrees, where it initially stated that 'company', which meant the insurance company.
My charges is for my CPT codes are proprietary to me. I do not want them selling my CPT information. I do not want them selling my patient information, in other words, how may patients I am seeing and of what type and the breakdown. I do not want them selling it to some company and making money off of me. My information is private. I am going to send my claims to them. They need to keep that information private. Because what I hear all the time, and I am sure you are going to hear this all the time, they say, ' other doctors do not charge this amount They should not be telling me this because that other doctor's information is private and confidential as well. So if they are going to keep information as far as proprietary information exclusive and private, they need to do the same with yours.
Anytime you have a clause where the provider is restricted from certain activities, make sure that the carrier has the same restrictions. The one thing that you want to do with your insurance contract is make sure that it is equal. There should not be anything that says, 'with the exception of' or 'carrier or company is allowed to', I get that removed because I say, if you can do it I can do it, it is that simple.
Watch out for language that requires a termination to be submitted six months prior to a termination and it is not effective for months after the termination date, and there is an example in here on which I will talk about in a second. For example: 'this agreement may be terminated as of the anniversary date of the effective date by either party with at least 120 days prior written notice to the other party and to the Department of Insurance. Prior to such anniversary date of the effective date provided however that no termination of this agreement pursuant to this section shall be effective during the initial term there of.' So what they are saying is: During the initial term, which could be two years, you are not allowed to terminate. That is what they are saying to you. And it has to be submitted within the 120 days of the effective date or the anniversary date. So if the anniversary date is in March and this is May you have got to wait until March of the next year, 120 days before that and it may not even terminate until after that, so be very careful.
Another one: obligations following termination. 'Following the effective date of any expiration or termination of this agreement or any plan, group and participating group physicians, will cooperate as provided in this section and this section shall survive the termination of the agreement regardless of the cause of termination.' Well, what you want to do is if you terminate, you terminate--it is that simple. What some insurance companies do is they will say, 'well you have to continue treating these patients until you can provide them with another provider.' What if takes you a year before you find them another provider? It means that this contract is going to be continue on beyond the termination day. It may state that you maybe required to continue treatment with this patient during their long term illness. Well they may have it for 20 years. So that means that this contract is going to continue on for the next 20 years. Basically if you terminate, you terminate. And as you can see, there is really nothing in this section that really says anything other than it survives the termination of the agreement, regardless of the clause.
So when you terminate your contract, there are several things that you want to do, you want to make sure that all your claims are paid, once you are terminated, as a non-contracted provider. You do not want them to continue on with that negotiated amount once you terminate. Make sure that the contract says that all your outstanding claims that you have got are resolved within a specific timeframe after termination. Because you may have claims from a year before that still have problems. I have got a contract that we signed in November of 2003. We met with the insurance company two weeks ago and we still have claims from November of 2003 that they have not paid or they paid incorrectly. And we are giving them 60 days to resolve this and then we are submitting our termination letter if they have not got these resolved. So we giving them time to cure. But we told them, if you can't resolve these we are going to terminate and we are going to take all these outstanding claims that you haven't resolved in 60 days and we are going to take you to court, it is that simple. Because we now have a contract which can be used against them. And do not allow anything to survive the termination, again once you terminate, you terminate.
Insurance Company Should Be Responsible For The Actions Of Their Payers
Now another section is relationship with the parties. What you want to do is read each paragraph carefully to see how the insurance company lists themselves with their payers or any acquired companies that they have got; some contacts state that they have no involvement at all and you must resolve all problems with the payers. I would demand that if they sign a contract, they are responsible for payment of your claims and the actions of their payers. I do not want to go chasing payers around for payment. If I signed the contract with ABC insurance company, ABC insurance company is responsible to me. They are the ones that are in the contract, they are the ones that signed the contract. It is that simple.
Dispute resolution is another section that is part of the contract that you need to read very, very carefully. It basically states how you and the insurance company are going to handle your problems, if any problems reside. The one thing you want to do is make sure that there is nothing in there that gives up your rights to resolve any issues in a court of law. Usually I have to have this added as a statement to my contracts where it states that the provider and provider group do not give up their rights to resolve any issues in a court of law. If they say they would not agree to that, then basically that is when you get up from the table, you say, 'I am sorry but we cannot negotiate any further because we do have to have this in there. Please go back and talk, otherwise we are at a dead end. We are not going to be able to continue with the contract.'
Dispute resolution, there is lengthy language here on this one slide that talks about arbitration. And basically if you are going to arbitrate then it has to be in accordance with the American Arbitration Association that is conducted by an arbitrator in accordance with the arbitration rules that is governed by the federal arbitration act. Basically the arbitration is handled within your county because a lot of times they put down in their county where they are located. It has got to be where you are located, not where they are located.
Remember I said that there is section in there regarding miscellaneous. This will list clauses that really do not fit anywhere else and what you want to make sure is that you can understand the language, if there are any references make sure that the reference is there and that it is easy to read, it is understood and that both of you agree to these things. Many contracts make references to a provider manual, like your big insurance companies, Avmed, Aetna, Blue Cross Blue Shield, United Health Care will all have provider manuals and the contracts make reference to that. Make sure that you get a copy of that provider manual before you sign this contract and you read it because a lot of times the manual may override what you are trying to do in the contract. So in this case: 'if they do not provide me with a copy of the provider manual I have reference to remove it from the contract. If they are going to provide me with a copy of the manual then basically I have language that states that in the event of the conflict the agreement takes precedence. Usually, I have had all of them agree to this with no problem at all.
Medically necessary. This is the big one, right here, there is a question in many contracts as far as who determines medical necessity. Is it going to be the provider doing the treatment or is going to be the carrier's medical people? Well in my contracts, I state that the medical necessity is determined by my physician, my physician saw the patient, and my physician treated the patent. Therefore my physician determined whether or not it was medically necessary to treat that patient. Now usually what I will do is I will say, 'give me a list of all procedures that you deem to be medically necessary.' If they say, 'we do not have any,' then I will simply require them to state in the language that there are no procedures that are medically necessary as part of this agreement.' That is the way I get away with it. Usually they would not give me a list either that way I can get away with adding that additional language but my doctor determents medical necessity, not theirs.
Again, make sure your timely filing limits are in the accordance with what your state law allows. If they allow 180 days, why except the 90 day filing limit? Have language added that states--'in accordance with applicable state and federal law' because if you have got that in there and the state law changes to 200 days, then you are fine.
Covered and non-covered services. I make sure that the contract specifies what is and is not covered. I give them a list of my CPT codes. I say, 'which one of these are not covered?' And if they say, 'we do not have a list.' Then I say, 'obviously you cannot deny it for non-covered services.' I have language specifically stated, 'that unless otherwise specified, all services provided by the provider are deemed to be covered services,' and that way they cannot deny my claims as non-covered. And if they do deny for non-covered, which they should not--with the ones where I have them agree to that, I have yet to have non-covered service denial, never with those quot; but I do want the caveat in there that allows me to bill the patient for non-covered services. Do not agree to any conditions that require you to obtain the patients' permission to bill them. Do not agree to give any discounts if the claim is denied for non-covered service because some will. They will say, 'if we deny for non-covered services you must give the member a 20% discount.' Do not agree to any discounts. If it is denied for non-covered services then Bingo, what you need to do is get the full amount of your services.
PPO affiliated companies and third party administrators. You may have references to these. Require them to give you the names of all of these. Get their addresses phone numbers and managers. Do not allow silent PPOs in your agreement, plain and simple.
Attachments. Look for references to attachments. Make sure that they have these attachments with the contract before you sign the contract. Do not agree to accepting anything that is blank, do not agree to accept anything after the contract. Some of these attachments may be due to a Medicare or Medicaid products that they offer. Read those very, very carefully as well. Because they may require you to do things that you really should not be doing. For example, in one contract, because of emergency care, one contract with the Medicare attachment required use to have the patient sign an ABN form and I went back and said, 'Medicare does not require this for emergency care.' So we had to have that removed from the attachment.
Any changes additions or deletions. What I do is when I make a recommended deletion I redline it. If I make a recommended addition I usually put it in bold, black and underlined. And if I make a comment, like I have additional questions or I say, 'what does this mean?' then I put it in bold and red. That way when they get it, they will be able to easily see what I am talking about, what I am negotiating the language.
Negotiating the language--just this is actually the hard part right here. Once you review the contract, return it to the carrier for review. Let them look at it. It can take weeks; it can take months for them to get back to you on this. A lot of times they will give it to their legal department and it will take forever for the legal department to get back. One of them I am working on now. We gave it to the insurance company back in November. We are talking week to week now--but it is still in the hands of attorney and this is what July. The attorneys have had it since November. Yet, the insurance company is putting pressure on the hospital for us to sign this contract. Weare just simply going back to the hospital saying look, it is in their hands. They have got the contract now. Most of the time the insurance company will tell you that they cannot make any changes to the contract, well they can. I have had three of them to say 'we are not going to make any change to the contract. We are not going to agree to any changes to the reimbursement.' I said, 'fine, no problem.' We are not going to sign the contract and some of these we have not and they stopped negotiating with us. That is not a problem for us. I am not going to arbitrarily agree to what they want me to do, especially if the contract contains language that is going to violate state or federal law or require my doctor to do something that is not part of his specialty. If they are not willing to make changes then do not proceed further and do not agree to sign the contract.
I know a lot of doctors simply sign the contract, they do not look at it, and then they end up coming back saying, 'I am not making any money' or 'the insurance companies doing this.' One doctor I went to just recently and she has got signs everywhere: 'I do not have malpractice insurance.' It is a clear sign that she is in financial disaster and I looked at her contract. She agreed to give the carrier an 80% discount based on the Medicare allowable. When I took it and put into numbers, she agreed to give them an 80% discount. The remaining amount of money was basically a small pittance that they agree to pay her and the rest of it was the patient's responsibility quot; either co-pay or deductible, and when I finally got done, all she was making was $5 a claim. That is if she was not collecting the patient's responsibility. I told her you need to renegotiate the contract. She goes well, 'they are nice to me.' Yes, they are real nice to you, they are driving you broke. You cannot pay your malpractice insurance and you are in a very small office right now and you are telling me, you are crying to me, you are not making any money. You are better off quitting being a doctor and going to Burger King and hashing out fries and making more money then what you are making now as a doctor. Let us re-negotiate your contract, and she said, 'I am not going to do that.' I said. 'I cannot help you then. You have made you bed now sleep in it if you are not willing to make the changes.' Because once you sign that contract, it is binding on you. It is a legal document that could be used against you. But on the other hand if you got a good contract it could be used against the insurance company as well. If they agree to make changes, be prepared to make changes yourself.
The insurance company again may ask to have something put back in and is not required under the law. Look at that paragraph very, very carefully. If it is not going to hurt you, then agree to have it put in. I do that all the time with certain things and they say, 'well we have to have this in here.' I see it is not going to hurt me. It is really not going to have any adverse effect, so fine. I'll put back in, and again, it shows that I am willing to make concession because you want them to make concessions.
Once you and the insurance company agree on the language then some will make the changes to the entire contract. Some will put it in as an amendment. Look at the amendment very, very carefully and go over it to make sure that they did not mistakenly leave something out that you have negotiated already.
Now let's say all of your monthly expenses equal $20,000. I know that is small but we are looking at a small practice here, for sake of argument. Now take your expenses and divide that by the minimum number of patients you see.
So, you take your expenses; divide that by the minimum number of the patients you are seeing. $20,000 monthly expense, divided by 160 patients, equals your bottom line. $20,000 divided by 160 equals $125. $125 is your bottom line. When you are negotiating with an insurance company, you cannot go below this amount per patient when negotiating your reimbursement. So that is what you have established for your bottom line.
Now, what the insurance company is paying you. General Sun Tsu was an old general from China about 3000 year ago and he said the best way to defeat your enemy is to know your enemy. I know my enemy when I go up against them. I want to know how many patients of this insurance company I see in a said period. I want to know how much I am being paid as a non-contracted provider, I want to compare my fee to the Medicare allowable--because a lot of them want to pay me based on Medicare allowable--and I want to know how much the top dog is being paid. I want to know how much the top executive is being paid because that is money that I am giving up to pay this guy's salary or this lady's salary.
Now, how much you are being paid is a non-contracted provider. For example, let us say the charges are $110,500 after you have run those reports on the insurance company. The insurance company is paying you $72,250. In another words you are being paid $130 per patient and you are being paid 65% of charges by this insurance company as a non-contracted provider. Basically we took the 850 patients from the previous slide, divided that into the $110,500 that means you are getting paid $85 per patient by this insurance company. Your bottom line is $125.
You are not even being paid your bottom line by this insurance company as a non-contracted. If you want to make your bottom line, you need to make 97% of charges just to make 125%.
Now Medicare carriers want to pay you the Medicare allowable or what they call RBRVS. When you do your spreadsheet and you list all the patients seen for this insurance company, add a column and add the Medicare allowable for that procedure code. Then you total up the column. Let's say your charges are $110,500, the Medicare allowable is $89,106 when you total up that column, that means that Medicare allowable equals 81% of you charges. Now let's say the Medicare allowable is $104.83 per patient. The insurance company is paying you $72,250 or they are actually paying you 81% of Medicare. That is low. Never go below Medicare allowable when negotiating your contact because Medicare is already low. Your bottom line is $125 per claim or $106,250. In order to make your bottom line, the carrier has to pay you 119% of Medicare, which is $106,250/$89,106. So when you are negotiating, just to get your bottom line with this carrier, you have got to have at least the minimum of 119. Or what you are going to do, you may start at 150 and work your way down to where the two of you meet 119, but again that is just your bottom line.
Now in this example, you know you need 97% of charges or 119% of Medicare to meet the bottom line. They may want to pay you less than this. You need to stick to your guns, you need to tell them, 'I cannot go below this.' If they say, 'we do not pay other providers this amount.' 'Well too bad. You are talking to me now. You are not talking to other providers. This is what you need to pay me.'
I had one carrier that for a whole year said we will not go above 200% of Medicare. When I finally got done with them, they agreed to pay me 250% of Medicare and on January 1, increase it to 275% of Medicare. I stuck to my guns and I showed them the numbers. And the question that I always ask them, what incentive is there for me to sign a contract where you want me to lose money every month? In other words, I am entitled to a 100% of my charges. You want me to take a loss every month so what incentive is there for me to sign a contract with you.
Keep an eye on the insurance company once you sign that contact. Allow 90 days for some glitches to work their way out. There is going to be some glitches, but give them 90 days to fix that. Like the one we just signed, they put the wrong fee schedule in their computer system and once we identified it we notified them and we told them look, you have got a week to get it fixed and they fixed it.
If they are not abiding by the terms of the contract we need to consider terminating it. You contract is your leverage to getting things done. That is the one thing you need to understand: once you sign it that is your leverage. If all else fails to correct any contractual issues, consider terminating that is why I only have a one-year. I watch them during that one year. At 9 months I give them the warning, 'you fix or we terminate.'
Many times when terminating the contract they are going to do everything to try to keep you contracted, because once you terminate then we go to go through the whole process all over again and they do not want to do that. That is expensive for them to do. I am just doing it in addition to all the other work I do. I have got the contracts set aside. I pull them up whenever I want to talk to them and then we will work on them. So I am not spending a lot of time on them. My recommendation is, my boss does not have his contracts reviewed by an attorney. We do have an in-house attorney. The house attorney said Steve is doing a good job; just leave him doing what he is doing. If you do not have some body like me that is experienced in doing contracts, have it reviewed by an attorney.
If they refuse to negotiate, if they do not want to bend to your requests, then walk away. Or you demand to have somebody else that can make a decision, because if this person says, 'I have go to talk to so and so,' what you need to do is get somebody that can make that decision, because I can make the decisions for my provider. I know what my provider wants and does not want, it is that simple. Usually once I get it done I give it to him for final approval. A lot of times he will come back and say it looks good, I do not need to make any changes.
So these are the final words that I want to present to you when negotiating an insurance contract. Make sure that it is fair to you, not to the insurance company. There is a little cartoon I added in here and it is a gentleman sitting before this big fat cat sitting behind the desk, and it says, 'when they say trust me it is a standard industry contract' what they really mean is, 'ha-ha-ha screw you pal.' And that is what some of these contracts do, that is what they really mean. Basically operator we are now ready to open up the lines for questioning.
Answer: Oh that is a goody. 'Usual and customary,' that has been a thorn in the side of the physician community for ages simply because there is no clear definition of what usual and customary is. Usually the insurance company has their definition of usual and customary and the physician has his definition of usual and customary. When you negotiate a contract, you should never accept reimbursement based on the terms 'usual and customary' or the term 'prevailing rate'. Prevailing rate basically means whatever the insurance company has established for that procedure code. In some cases it could be an amount that is ridiculously low. You should negotiate a reimbursement amount that meets you requirements and not that of the carrier. Again determine your bottom line, base you reimbursement on that bottom line amount. If they refuse to budge neither should you. There is usually a middle line that could be met when you are negotiating a reimbursement amount.
Question (NB): Okay, our second question asks, what do I need to look or ask for when negotiating contracts with a payer that includes 'usual and customary' language?
Answer: Basically the answer is the same as what I just answered. First off, if they are going to use the term usual and customary language in its contract, you should have a definition of usual and customary and you should be reading that definition to see if it meets your requirement and you are satisfied with that definition. But again, base your reimbursement, not on UCR, but base it on your financial needs. If the carrier simply states 'we reimburse UCR' ask them what do they mean by UCR? What does that mean in dollars? Let them know that your offer is X-percent of bill charges or the comparative Medicare allowable amount. If you accept what the carrier deems to be usual and customary, you could be giving away up to 80% of your revenue but start at an amount that is higher than your bottom line. Give the offer to them--like with the carrier that said 250--I started out at 350% of Medicare. They started at 150. What we finally got done, they said we are not going to go over 200%. I said I cannot go to 200% that is below my bottom line and that is when they finally agreed to 250 and up to 275 next year.
Question (NB): Next question says-What should I look for in utilization management, professional review language when negotiating a contract with the payer?
Answer: Now this is the big one. Utilization management basically is performed for specific services that are required by the insurance company to determine medical necessity. They determine appropriateness of the setting of the medical care, the length of stay and the length of care. If you are a hospital based physician or medical group, the language should be changed to reflect that this does not pertain to you because the hospital performs this function themselves. That is what I put in my language because some of my doctors are hospital based physicians. The insurance company should seek this information from the hospital or if you are in private practice, then obtain a copy of their policies and procedures on this and read them. See who determines medical necessity. Make sure that it is your doctors that determine medical necessary. For example, you do not want an oncologist making medical necessity decisions for patients seen in the emergency room. These should be made by a board certified emergency physician.
Make sure that the carrier's decisions are not final in binding. If you disagree with the carriers findings, make sure that you are provided with the name and specialty of the person that made the decision. Make sure that you are provided with copies of all documents that they used to make that decision. Make sure that all these copies are provided free of charge and if they are not provided in a specific time frame, then the decision is reversed.
As far as professional review is concerned, that is where the insurance company reviews services to determine if they are medically necessary. And they determine the quality of health care services. These are usually further defined in the carrier's policies and procedures. Demand a copy of these for review prior to signing the agreement, then review the language to see if it is pro-carrier. Look to see who makes the decisions and if the decisions are final. Look to see what documentation is used to perform these reviews. Look to see what appeals processes are available, if the carrier makes a determination that is contrary to industry standards. Okay, I hope that answered it. That was a mouthful.
Question (NB): Our next question says, what do you think of indemnification language in a contract?
Answer: I talked about this earlier. It is my policy--I do not indemnify the insurance company at all. The intent of indemnification is to protect the insurance company and hold them harmless for their actions. I never allow the insurance company to be held harmless for their actions. In some cases state law requires the provider to hold the patient harmless due to the actions of the insurance company. If state law requires this, then it must be a component of the contract and we have to agree to that. The usual contract language will state the following: Provider agrees to indemnify, hold, and hold harmless name of insurance company, its directors, officers, employees and agents from any claims, suit, cost or expense including, but not limited to, cost of the defense incurred by name of the insurance company or such person as a result of negligent actions or breach of the agreement by the provider. Now that is usually the language that you are going to see in a contract. 'Hold harmless' connotates that if the doctor costs the HMO because of his or her negligence, he or she is obligated to make the HMO whole again. To put the HMO back into a position that existed before the harm was done. I tell the insurance company this language needs to be removed because we never agreed to hold the insurance company harmless. We require the contract language to also state that we reserve the option to seek restitution in a court of law.
Answer: Sure.
Question (RB): And your response?
Answer: We tell them, our consultant needs to be there. If they do not like it, well, there is no meeting. It is that simple. This is with a large insurance company and it just was not a consultant; they said, we do not want Steve there at the table because they know that when I come to the table, I come in with all the my references, all of my documents, all of my books, all of my spread sheets and it makes them look bad. And they have literally told my doctor, 'okay, we are going to hold another meeting but Steve cannot be there.' My doctor did it one time, then he came back and said, 'they said that you did this, you did that' and I actually had spent the rest of the day defending myself. I showed my doctor that what the insurance company said was wrong. He was so angry; he said, 'they are not going to do this to me another time.' So, we held the next meeting. I walked in, they said, 'we do not want him in here.' My doctor says, he is here or we end the conversation right here and now. And he is here for every other meeting because I want him here. He is here to provide me with the information that I need, so I can help negotiate my contract with you. If they say no consultant, then no meeting, it is that simple.
Question (RB): Okay, and I guess that would probably dovetail into my next question. It seems like most of the physicians that we are working with, they already have the contract in place. Obviously occasionally a new contract will come up and it is so much easier to negotiate a contract prior to signing it rather then once it is signed. Do you just pick your battles here at the beginning, do you go after everything once a contract is in place? I guess the first question is, when do you start, when do you look at the terms? And if it is 120 days before the anniversary date, you start three months before that--what are your suggestions when the contracts are already in place?
Answer: You can negotiate at anytime. It is that simple. There is no law that says you have to wait until this, this, this and this. If you see that you are having a problem, or you sit down and you look at your numbers and you see that the numbers are not right. You are actually losing money. This is what we did with one of the major insurance companies. They make me blue. I am not going to tell you the name. But what happened was we just signed the contract and we had to meet with them because we saw that they were not abiding by the terms of the contract. We saw they were not paying us the negotiated rate. We saw that they were still paying the same games they have been playing for the last 10 years. We finally called them up and said; look we have got to have a meeting with you to talk about this contract. They flew in their senior medical director and one of the big muckety mucks that does contracting for the company here in the State of Florida. We sat down and we had a meeting with them. We showed them EOBs, we showed them spreadsheets, we said to them, 'look, you said that when we signed this contract all of this would be taken care of. You are in violation of this part of the contract, this one, this one and this one. So, if you cannot straighten this out, we are going to bill your member.' The only thing they said was if you bill the member, you are in breach of contract. They did not care to hear that they are in breach of contract. So we simply looked at them and said look, this is your ultimatum; you are going to get it in writing today. You have got 60 days to cure this or we cancel this contract. So the one guy that I dealt with for two years in negotiating this contract, his eyes went up into the ceilings and he said, 'I do not want to go through this again.' I said, 'well, we may have to. We are going to have to change the contract again so that it is fixed so that you do not do what are you are doing now.' We are going to be adding language to the contract. So you can negotiate at anytime.
Question (RB): Okay. Do you have any recommendations for pay for performance clauses in a contract.
Answer: I do not understand what you mean by pay for performance.
Comment (RB): I am sorry, it is kind of, I guess a coined phrase. We are from Indiana and we hear it a lot. Where you are actually being paid because you can prove that you have met certain standards as far as quality and therefore you get a higher reimbursement because you have provided a "higher quality of service for that patient"?
Answer: Okay. What is your question about that?
Question (RB): Do you recommend putting that in any of the contract?
Answer: If it is beneficial to you, yes. Add anything you want to the contract that is going to be beneficial to you. For example rural health clinics, where you have got a doctor working for a rural health clinic and there are not enough physicians in the area. And you have got a doctor that has to travel to this location and if he travels to that location and sees patients at that location he is going to get higher reimbursement. You can ask to have that put in. That is the wonderful thing about contract negotiations. You can ask to have things put in that are going to beneficial you. They can say yes they can say no, but if you can justify it try to have it put in, that is all.
Comment (RB): Okay, thank you. That is all.
Answer: You are welcome.
Answer: Well, I do not know it deals with contracting but let me say this; if the contract language states that the provider must supply these implant voices before being reimbursed and the provider agreed to it, then the provider has to abide by the terms of the contract and submit the invoices. This is why reviewing your contract is important. Once it is signed, it is a legal and binding document and it is not just with the insurance companies--it is with the provider as well.
Now let us say the provider is not contacted and the insurance company is making this requirement. The provider has no obligation to do this because the carrier's internal policies and procedures are not binding on the provider. If the carrier demands this, place the onus on the patient. Have the patient pay the provider and then have the patient be reimbursed by the insurance company. But that is thing to understand, whether you are contacted or not. If you are not contacted with the insurance company, you are not obligated by their internal policies and procedures. Technically speaking, the contract that exists is between the patient and the insurance company and you are not a party to that contract. You are entitled to get full reimbursement from the patient and it is the patient's responsibility to get reimbursed by their insurance company. I hope I have answered that.
Comment (NB): Thank you so much.
Answer: Sure.
Okay. Ladies and gentleman, first of all I want thank everybody for their questions. They were good questions. The thing I want to try get people to understand, again, I am not a lawyer but I represent my provider and I am out here everyday negotiating insurance contacts for my doctor. I want to make sure that the playing field is level; I want to make sure that the contact is not pro-insurance company. I want to make sure that the contact is pro-doctor. If you have got a good contract, when you are done and you have got a good reimbursement rate and you have got all of those little loop holes closed in your contract, and once you have signed that contract then that is something that you could start using against the insurance company, because you can bet the insurance company is going to use it against you.
Take you time, read the language, make changes that you feel need to be made to the contract. If you are very adamant about certain things, require them to put it in. If they say no then walk away, as long as you have not signed the contract, there is no damage. But if you agree to all these terms and conditions that they want in, then it is going to hurt you down the line. That is what going to happen. It is going to hurt you down the line and it is going to hurt you in your pay check. It is that simple. Please take your time, negotiate, get a good reimbursement rate then sign the contract. Keep an eye on them, and if they are doing what they are supposed to do, then fine; watch them every now and then but at least you will have a decent contract and you have a decent reimbursement rate.
Now I want to thank you for coming today. If you have any question after this, please feel free to contact the Coding Institute. They have my e-mail address and they will be able to contact me at anytime and I will do what I can to help you out. Thank you.
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