An MCO Contract Negotiation Checklist
Once you’ve determined you want to contract with a managed care organization, assess your strengths. The following factors can make a contract more desirable to the MCO and give service more contractual leverage. Geographic exclusivity - State law may require MCOs in a 911 franchise area to contract with a provider for emergency services or pay 100% of billed charges (except for the caveats mentioned below). The MCO can save money by contracting for these services, even at 100% of billed charges by eliminating the need to process each claim manually.
Network MCOs look favorably on ancillary ambulance providers that have good relationships with others, MCOs, physician groups and hospitals.
One-stop shopping/price summary. MCOs often prefer to contract with providers that can provide lower priced services for non-emergency business than competitors and/or an array of services such as emergency, non-emergency, wheelchair and air ambulance.
State and federal laws make certain contractual elements non-negotiable. However, the following items should be negotiated to everyone’s satisfaction.
Timely payment. The contract should stipulate how long you have to submit a bill and when the MCO must pay that bill. It should also detail the process your service must follow to submit bills after the timely filing deadline and any timely billing procedures required by your state.
Clean claims requirements. Specify the MCOs claim requirements.
Billing manual. The MCO should provide you with a billing manual.
Written appeal and grievance policy. Agree on how to handle payment details.
Balance-billing stipulations. Spell out whether your service will be allowed to balance bill patients if the MCO denies the bill for lack of coverage or the patients is ineligible for a service. Also stipulate whether your agency must give the patient advance notice of non coverage and if so, in what format. Because balance billing provisions vary by state, consult your attorney before finalizing this provision.
Define Payment Rules
The contract should specify the following:
- Authorization of services by the MCO should guarantee payment
- The MCO will not conduct concurrent or retrospective claim reviews (that is, the MCO may not deny payment for services previously authorized).
- Covered services most include emergency services
- The definition of emergency services should include BLS-emergency, LAS, ALS-emergency, critical care transport and paramedic intercept.
- The MCO should pay per copy rate for copying all medical and administrative records.
- Services must be paid based on the predetermined rate schedule and not based on the lesser of the negotiated rate or the MCOs usual and customary rate or internal fee schedule.
Try to negotiate a provision that deems all 911 dispatches “emergencies” for payment purposes under the contract
Strive to negotiate payment for 100% of billed charges for emergency services. Some state require MCO to pay only “reasonable fees” or “reasonably necessary costs” for emergency services, but providers should take the position that “reasonable” means 100% of billed charges. MCOs may, of course, properly deny claims for a lack of medical necessity or patient ineligibility for services.
Get to know your MCO contacts. Agreements can be lost when providers don’t have the right contacts within an MCO. Typically, an MCO provider relations or provider contracting department will handle contracting for ambulance services. They may assign this task in different people in the department for different geographic areas. Providers that cover multiple counties or townships should get the names of all their contact people. Then try to narrow the negotiating process to include just one MCO representative with the authority to negotiate one agreement for all locations, provided those locations are all in one state.
Follow through. Stay on top of the process. MCO officers often juggle myriad tasks and contracts. In this environment, they tend to first deal with the sticky wheel or the provider who is seen as the most vocal, the most prompt and the most visible. You can do this by asking your contracting hospital and/or medical groups to call and recommend your services. You may also want to ask the MCO to e-mail you a draft of the contract (MCOs sometimes agree to e-mail draft agreements, as they consider drafts non-binding). Contact the MCO constructing officer a few days after the arrival of the document to follow up and negotiate your rates.
Be persistent. While an MCO may not be interested in contracting initially, this can change for any number of reasons and at a moment’s notice. To stay on top of the changes, stay in touch with the MCOs contracting personnel. Make a note to call them every couple of months and ask then when you should call back. Doing so can make all the difference.
Negotiating a successful contract takes knowledge, patience and understanding of the MCOs need to ensure excellent service to patients at a reasonable cost. A successfully crafted contract can better meet the needs of the patient, the health plan and the ambulance provider.
Healthcents is a full-service consulting group that specializes in provider contracting and reimbursement analysis. Susan Charkin can be reached at Healthcents, (800) 497-4970; fax (831) 455-2695; email: firstname.lastname@example.org