I was recently asked to describe the current contracting environment between providers and payors. The word that comes to mind first is “uncertainty”.
The health reform legislation we all followed
so closely is stalled. The legislation
included weeping changes to insurance practices, including a possible shift in
control over health insurers from traditional state regulation to federal. On Thursday, the President chaired a Health
Reform Summit to expand the range of proposals being considered. Some proposals would include the
restructuring of payment arrangements.
Even without reform, these contracts
face changes with the upcoming ICD 10.
So, how do you proceed with negotiating
a 3 year, 2 year or even 1 year contract in the face of this massive
uncertainty? Several ideas to consider:
-
Include a right to
reopen the agreement if changes required by state or federal law, or perhaps
sweeping changes in the marketplace for services in your region deprive you of
the “benefit of your bargain”. As a best
choice, draft the clause so that you decide whether to reopen. As an alternative, consider having the
determination made by a neutral third party.
It may also be necessary to specify what level of benefit must be
deprived before your right to reopen arises.
-
As a less
preferred alternative, your remedy for loss of the “benefit of the bargain” may
not be the right to reopen, but to terminate.
-
Ask that any
changes to coding, payment structure or payment methodology be implemented on a
revenue neutral basis. Be sure to define
whether revenue neutrality” takes into consideration only price per unit of
service or price times quantity provided per unit of service.
-
Provide a fast
track dispute resolution process for changes to be made as a result of state or
federal reforms that will affect the contract.
-
Consider whether
to adjust the usual term of an agreement that you will accept.
As
always, I appreciate any additional suggestions or wisdom that you care to
share.
Comments