Q&A: Reviewing standard payer contract language

Q: I’m working with our contracting staff to negotiate with a new payer. Is there any potentially problematic contract language I should take under further review?

A: Most large payers use boilerplate contract templates with language that you must be on the watch for. Some sections to beware of are the "Entire Agreement" and "Assignability" clauses. The "Entire Agreement" clause makes it necessary to ensure that any verbal agreements or marketing promises made during the negotiation or prenegotiation processes are specifically documented within the body of the contract; if this is not the case, they will not be considered as part of the contractual agreement. This language also holds the provider to any reference material on the payers’ website or other locations (e.g., payer operations manuals, medical policies), implying that these have been read and are understood and agreed to prior to signing. A common phrase is “provider shall be bound by and abide by all policies and procedures set forth in the Manual.” Check your contracts for this language and always review the payers’ operations manuals and clinical review policies. Carefully review the clauses containing appeal timelines, authorization requirements, and timely filing limits to ensure your facility can follow them.

For more information see The Essential Guide to Healthcare Payer Contracting.