Managed Care Contracting

1. Managed Care Contracting The Basics Lawrence Downs, Esq. MSNJ Educational Seminar Series Northern New Jersey Region April 26, 2006

2. DISCLAIMER This presentation is for educational purposes only and is NOT legal advice. You must consult your personal attorney for legal advice. Counsel can help you � make the investment.

3. AGENDA Contract Basics Some Key Clauses Purpose Clause Term and Termination Other incorporated documents Fees and departures Homework Find your contracts � review your relationships

4. Contracting Basics �An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law� (Blacks Law Dictionary, Eighth Edition)

5. Contracting Basics . . . [b]ut if a definition were attempted which should cover these operative facts, it would require compressing the entire law relating to the formation of contracts into a single sentence. -Samuel Williston, A Treatise on the Law of Contracts, 3rd Edition.

6. Contracting Basics Locate all your contracts you are currently a party to. READ THE TERMS and how they relate to your practice. Evaluate the performance of your existing contracts at least annually to determine if the agreements are working for you.

7. Contracting Basics Try to figure what your economic return will be under the contract. Be honest. Don�t just use the highest volume or the best fee schedule, you should figure the return based on average performance. Above all, know what your breakeven price is, and evaluate the contract in that context.

8. Consideration Important and necessary element of an agreement What are you getting in return for your effort. What are you getting in return for the loss of control? Fees + Patient steerage. Every contract change should trigger a re-evaluation

9. Key Clauses Purpose What is the stated purpose of the agreement?

10. Managed Care Version � The parties agree the purpose of this agreement is to control the cost of healthcare while providing medically necessary services to the members of Healthplan X�

11. Better �The parties agree the purpose of this agreement is to compensate the physician fairly for providing medically necessary healthcare services to the members of Healthplan X�

12. Term & Termination How do I get in and how do I get out if this goes bad? Auto renewal � understand how auto-renewal works and when rollover occurs. Know the process for termination and your obligation to provide care. State law controls

13. Other incorporated documents When is your contract not your contract? Provider manuals Utilization review policy Provider policy and procedure documents �Incorporated by reference�

14. Fees When is the fee schedule not the fee schedule? Other contracted rates Silent networks 30 day notice of changes

15. Start Now Find or request all contracts Make note of termination dates and procedures Re-evaluate your contracts periodically, retain relationships that work. Ask for better terms if you want to keep the contract. Settlements may make negotiating easier

16. Managed Care Contracting The Basics Lawrence Downs, Esq. MSNJ Educational Seminar Series Northern New Jersey Region April 26, 2006