Once upon a time, several practitioners formed a group. The group signed a contract to receive referrals from a network. The group never did receive referrals from the network. One day the group split up and one particular practitioner continued practicing alone.
Years passed and she forgot all about the contract. One day, a patient to whom she had been providing an ongoing course of care reported that he was not being fully reimbursed by his health plan for her services. She did not have a contract with his plan and had been treating him on an out-of-network basis. He had been paying her out-of-pocket and sending the bills to his plan. With further research, she learned that the plan was claiming a discount under the old network contract. As it turns out, when the group contract was signed, it had some language meant to bind each of the group members individually. The language could have been in the contract itself, or the group members could have individually signed. Either way, the network claimed that the contract was still active and that the practitioner continued to be bound.
To make matters worse, the old contract contained language allowing the network to make unilateral amendments. The network claimed that one of its unilateral amendments allowed it to give local health plans access to her old discounted rate without requiring the local plan to “steer” the patient. In other words, the local health plan, in exchange for paying a fee to the network, could discount the practitioner’s services to existing patients. In still other words, the practitioner received no benefit in exchange for her discount.
The practitioner immediately terminated her agreement with the network – while continuing to argue that the contract had not been valid for years and, even if it was in effect, it was never validly amended. Ultimately, the practitioner was able to convince the patient’s plan that her patient was entitled to be fully repaid.
However, the lesson is … Keep copies of those old contracts. Consider using some system to remind you (or someone on your behalf) to re-read your contracts once per year and if a contract is not active, and beneficial, to make changes to it or terminate it.
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