8/20/2018 Weird Vague and New Stuff in Provider Payer Agreements - - PDF document

8/20/2018 1

2018 TN MGMA

Penny Noyes, President, CE O & Founder

Weird Vague and New Stuff in Provider Payer Agreements

Objectives for this session

Identify key standard contract provisions and their impact – how to negotiate or manage them Identify some new or less obvious provisions in payer contracts/addenda and their impact & how to negotiate or manage them Overview of value based and bundled payments programs to determine whether you want to be a driver/player in these programs

Quick Notes

CPT is the registered trademark of the American Medical Association (AMA) Due to Non-Disclosure Agreements the presenter may not always be able to provide contract language examples

8/20/2018 2

Key Standard Contract Provisions

• Rate Exhibit
• Amendments
• Term & Termination
• Products
• Timely Payment
• Timely Submission

Less Obvious but Important Provisions

• Joint Construction of Agreement
• Assignment
• Loss of Term w/o Cause
• Penalties for Demographics or Use of Non

par Providers

• Excluded Services
• How/When Notice Can be Given
• Mergers & Acquisitions/Change of Control

Rate E xhibit

Does it reflect exactly what you negotiated?

 Are all of your codes accounted for with a $ amount?

– Based on % or CF of specific year and locality of Mcr – Based on payer’s proprietary schedule

 If not, what is the default? - % charges; “gap fill”  If Medicare Advantage is 2% Sequestration applied?  Jcodes –what based on? – ASP + %; AWP +%; Payer Proprietary

– How and when updated? Often not stated in contract

 If carve-outs – are they in exhibit and do they expire?  If multiyear escalation clause – is it defined and who triggers?

8/20/2018 3

Lesser Of… example and issues

Lesser of… Contract Rate 80%* of billed charges (BC) OR 75% *of State Schedule for WC and/or Auto

Issues… Be sure chargemaster is set high enough above Contract Rates such that the % BC does not ever apply other than when no value in FS

Verify State WC/Auto Schedules…  Compare to Contract Rates  If poor, lessen the %

discount considerably

 If discounted amount

unacceptable, remove product from agreement

Sequestration – not a right of MAOs and not always obvious

CENTER FOR MEDICARE DATE: May 1, 2013 TO: Medicare Advantage Organizations Reducing Payments to Contracted Providers

Section 1854(a)(6)(B)(iii) of the Social Security Act prohibits CMS from interfering in the payment arrangements between MAOs and contract providers. The statute specifies that CMS “may not require any MA organization to…require a particular price structure for payment under such a contract…” Thus, whether and how sequestration might affect an MAO’s payments to its contracted providers are governed by the terms of the contract between the MAO and the provider.

Amendments The big “HOWE VE R”

8/20/2018 4

Amendments

Regulatory Mostly applies to Med Adv Tricare and Medicaid plans Ask for at least 90 days notice w right to object/terminate, assuming regs were known at least 90 days prior to eff date Ability to term just the affected product Might have exposure to amendment from effective date

• f amendment to termination

date if term notice longer than amendment notice period Non-Regulatory Material Negative Impact… who decides? Request Signature of Both Parties , usually answer is “no”… so… Might need to acquiesce to 90 days notice w 30 days to

• bject/terminate

State Law re material changes Unless otherwise herein… check products and rates sections for means to amend these in different manner

More Typical Amendment Provisions

Except as otherwise indicted herein, Payer retains the right to amend this agreement by making good faith effort to provide notice to provider at least 90 days in advance of effective date of

• amendment. If Provider objects, Provider

has the right to terminate this agreement with at least 30 days written notice from the date Provider received notice and Provider’s termination shall take effect 30 days from the date Payer receives the termination notice or on the amendment effective date, whichever is later. If Provider does not send such notice within the designated timeframe, it will constitute acceptance of the Amendment by Provider.

No signature needed to change rates, add products, etc. Failure to

• bject/terminate is

acceptance of the amendment

Joint Construction of Agreement

Parties acknowledge that they had the opportunity to be represented by counsel with respect to the Agreement. Therefore, notwithstanding any otherwise applicable principles of construction or interpretation, the Agreement shall be deemed to have been drafted jointly by the Parties and in the event of any ambiguity, shall not be construed or interpreted against the drafting Party.

Ask for it to be removed due to payer’s initial drafting of agreement and unilateral power of Payer to accept or reject requested changes Matters if legal action is necessary in future

8/20/2018 5

Tricare Regions Changed from 3 to 2 Contractors Classic example of “Assignment”

E ffective January 1 ,2018 - HealthNet West and Humana Military E ast Prior: UHC West, Humana Military South and HealthNet North

Loss of Termination w/ o Cause in Amendendment to Improve Rates

In exchange for Payer ‘s agreement to amend the applicable Plan Fee Schedule, as additional consideration for same, Group agrees that it shall not terminate this Agreement or an attachment thereto without cause as set forth in Section 6.2 of the Agreement during the term this Amendment is in effect.

6.2 allowed either party to term without cause anytime w 90 days notice (sometimes tied to anniversary) Loss of this right has no specified time limit… as long as amendment in place Terminate in future of agreement or product requires “cause” No future means to get payer’s attention to renegotiate

More Favorable Loss of Term W/ o Cause

In exchange for Payer ‘s agreement to amend the applicable Plan Fee Schedule, as additional consideration for same, Group agrees that it shall not terminate this Agreement or any attachment thereto without cause as set forth in Section 8.2 for a period

• f 12 months following the effective date of

this Amendment.

8/20/2018 6

Penalties for

Failure to Update Demographics: Unless prohibited by applicable law, Payer may, at its sole discretion, upon thirty (30) days prior written notice to Group reduce rates for Covered Services by ten percent (10%) for a three (3) month period should Provider fail to provide timely notice of change in Provider information to Payer as required and set forth in the Agreement, e.g., changes in notice address, location, staff and demographics. Use of Non-Network Svcs: Payer may, at its sole discretion, upon thirty (30) days prior written notice to Group, reduce the rates for Covered Services by twenty percent (20%) should Provider fail to refer Members to Non -Par Providers in the absence of: 1) clinical reasons; 2) advance approval of Payer 3) existence of an Emergency Service need; or 4) documented Member’s request for referral to an out

• f network provider …

E xclusions: May be category, like lab, DME

• r Rx,

and may be specific to an employer or union plan

RECENT RHEUMATOLOGY GROUP LETTER

Dear Provider The Fund Has recently received the above claim for an injectible that is not covered under the member’s medical

• benefits. This injectible

should be purchased through the member’s pharmacy benefits.

Contract says:

If Member’s Benefit Program excludes certain services or limits the Member’s choice of participating providers, such services are not considered Covered Services under this Agreement for such Member

Mergers & Acquisitions

In the event Group acquires

• r is acquired by, merges

with or otherwise becomes affiliated with another provider that is already under contract with Payer, this Agreement and other entity’s agreement will each remain in effect and will continue to apply as they did prior to the acquisition, merger or affiliation unless otherwise agreed to in writing by all parties to such agreements If the acquired entity no longer exists, such provisions have a disconnect, and yet payers hold firm they will not add new entity at the preferred rates and terms If acquiring, perhaps best to terminate acquired entity’s agreement so that it is not “already under contract with payer”

8/20/2018 7

Favorable Notice Provisions

Less Favorable Notice Provision

Newsletters, E mail, Twitter, etc… ..

Any notice regarding Term and Termination;

• r to Provider ‘s objection to participation in a

Product shall be effective only if given in writing and sent by overnight delivery service with proof of receipt, or by certified mail return receipt requested. All other written notices may be sent by letter, electronic mail or other generally accepted media. Notice addresses are specified on the Signature Sheet to this Agreement

Policies and Procedures

Manual is part of Agreement

8/20/2018 8

Notice to Members if Terminating

Will Payer and/or Provider send notice to members? Timeline for notices Does agreement require provider to

 notify members and/or state agency?  get approval from plan before sending to members or

to provide payer with list of all plan patients?

 provide payer with list of all patients undergoing care?

Continuity of Care benefits after termination

 How long must parties honor agreement after term  Fully insured – check state law and contract  Self-funded – contract or policies likely prevail

Language E xamples regarding Notice to Members

Group will cooperate with Plan and provide Plan with a listing of Members affected by the termination within X business days of the date

• f the notice of termination.

Notification to Members. Upon termination of this Agreement, Plan will communicate termination to Members as required by Laws and Program Requirements. Providers shall

• btain Plan’s prior written approval of Provider

communications to Members regarding the expiration or termination of this Agreement.

Value Based beyond primary care

Payers are still slow to provide value based programs to specialists – Challenge the payers to establish a program together with you

 Keep simple – make sure both parties can track

and report metrics

 Define metrics – can use industry accepted such

as HEDIS or perhaps moving surgeries or diagnostics to in-network ASC/facility

 Push for aggressive timelines for reconciliation

and payment

8/20/2018 9 Bundled Payments – should you participate

Not traditional “bundling” of CPT Codes w overlapping RVUs

Instead…

• High Cost Diagnosis & Related Procedures & Services for which a

case rate for the entire episode of care during a defined period of time

• Could involve just one TIN for, say, ASC facility charge and

implants especially when payer does not cover implants, but this is better defined as a “carve-out”

• Focus today is on involvement of numerous Providers & TINs in

the bundle

• “Bundler” might be ANY One of the Providers in the Spectrum

for commercial but is the Specialist for recent CMS programs

Prospective vs Retrospective

Prospective – Fixed amount is determined and paid in advance Retrospective –

 Claims submitted  After Episode Timeline, Add up costs vs target  Reconcile periodically for wins and losses for all

episodes in a given score card period

Most Current Medicare programs tend to be Retrospective with quarterly reconciliation Commercial programs might be either, but be cognizant as you negotiate

If Your Are The Payer or TPA, What Are You Aiming For in Bundled Payments?

• Save $
• Improve Quality & Outcomes
• Can Be Administered
• Compliant - Legal and Risk
• Make Customers Happy

8/20/2018 10

Bundler or Convener

For Medicare Programs… typically the specialist For Commercial…The Bundler could be any

• ne of the providers in the episode but who

might not be able to offer all needed services for the defined spectrum of services for the Episode/Case The bundler may know its own costs for services under its TIN but does not know the costs associated with other providers in the spectrum.

What is the Bundler’s Role?

• Provide/Contract/Credential/Manage (in real

time) the Spectrum of Services Needed in the Episode

• Negotiate/Determine cost of all services by All

Providers

• Coordinate Claims Submission & Compliance of

All Providers

• Prepare for Risk of Claim Expense > Negotiated

Bundled Rate

• Determine Eligible Patients – Underwriting

Process

• Negotiate with Payer or TPA

What Services are needed in an Episode?

• Pre-Admission Screening – Specialist or PCP
• Imaging/Diagnostics/Lab
• Surgeons/Specialists
• Anesthesia
• Hospital/ASC
• Rehabilitation Facility
• PT/OT
• DME
• Drugs
• Home Care
• Other – May Vary by Diagnosis or Other Factors

8/20/2018 11

Bundler Is Now A Risk-Taker

How to minimize and prepare for risk

• Well Defined Episode:
• Timeline – when does episode start & end? Varies by Episode DRG
• Exactly What Services ARE and ARE NOT Included?
• Re-Admissions related to diagnosis or other conditions
• What makes a patient an outlier prior or during the Episode?
• Is there a risk adjustment factor to increase payment for outliers
• Exclude Unrelated Services Needed by Patient During Episode
• Underwriting Guidelines: Do you have the right to determine patients

eligible for the bundled program based on factors like…

• Age/Sex/Smoker/Weight/etc
• Co-Morbid Conditions
• Plan Benefits & Legal Compliance – what if PPO and can choose
• Patient Compliance with Treatment
• Buy Tracking Software or Partner with party with expertise to track patient

through the episode, keep scorecard and calc reconciliation

• Consider Reinsurance – Specific & Aggregate

Considerations BEFORE Your First Case

• Are All Providers Aware of Patients in the Bundled Payment

Program and provider roles in managing the case

• Can they suppress or administer their claims piece per the

contract? If submitting individually, may not get paid within normal timely payment period, but instead at end of episode

• period. Will this trigger bill to patient
• How do you or other providers submit the claim(s)?
• CMS 1500, UB-04 ?
• One Lump by Bundler or Each Provider?
• How and to whom does payer make payment? (If to Bundler then

Bundler’s 1099 reflects amount as income)

• If one payment to Bundler, how disbursed by Bundler to

Spectrum of Providers?

• What if Benefit Plan Requires Deductibles, CoPays and Co-

Insurance? To which providers’services do they get applied?

*Payer Systems are set up to pay FFS* *Laws may impact what payer can do or not* *How Self-Funded Employers play into this*

• Funding Arrangement of Covered Person
• Fully Insured – Carrier controls
• Self-Funded – Employer is payer and hires TPA to

administer claims

• Compliance with ACA and State/Federal Laws with

Regard to Collection of Copays, timely payment, etc – Provider may charge $0 to address

8/20/2018 12

So What Does the Patient Know About This Arrangement? What Impact Does this Have on the Bundler? How Does Each of the Spectrum of Providers Handle the Patient ?

• Patient Likely has no idea how the claim is being handled, but will

notice something is up, including not having choice of spectrum

• f providers, especially if PPO
• May Get confused if benefit plan requires, say, $35 copay for each

PT visit but it is waived at time of visit

• EOB likely reflects something not easy to decipher with regard to

charges or “allowed” amount

• Does Patient need to pay a single “patient responsibility amount”

to bundler at onset or after

• Have a Bundler Coordinator work with patients and spectrum of

providers to manage process

In Conclusion…

Be aware of the provisions that are in your agreement Understand the laws that might drive them Manage or Renegotiate If you are a candidate for Bundled Payments consider the many factors and risks, but it may be worthwhile. For more info visit

w w w .HealthBusinessNavigators.com

Reproduction of these materials w ithout w ritten consent of HBN strictly prohibited

Penny Noyes, President, CEO, Founder Health Business Navigators 1502 Westen Street, Suite 1 Bowling Green, KY 42104 270-782-7272 P.Noyes@HealthBusinessNavigators.com