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Phia Group Media


Network Contract Drafting: You’re Doin’ It Wrong

By: Jon Jablon, Esq.

Our consulting team recent came across a network agreement that had the interesting nuance of indicating that the provider would bill amounts that were in line with market standards.

Language like that is a killer. There’s no way around it. It’s so ambiguous as to be all but useless when trying to decide which amounts are properly billed. What exactly are the appropriate market standards? Who is empowered to decide that? When the payor and medical provider inevitably have wildly different opinions on that, how can they possibly resolve the matter when the contract language is so infuriatingly unhelpful?

In this example, the provider had unbundled certain charges, and argued that the market did in fact bear that billing methodology, since most private payors such as this one accepted it – and therefore it was proper pursuant to the contract. The plan, however, contended that a large portion of the provider’s business (and a large part of the total local market) was made up of Medicare claims, and CMS guidelines do not bear that type of unbundling – and therefore it was not proper pursuant to the contract.

Due to this tragically-unclear contractual provision, the payor and provider have been forced to either compromise (which neither wants to do), or take it to court (which neither wants to do, either). It’s going to come down to which option the parties hate less.

Another tragic aspect of this story is its moral. The moral of the story should be to make sure you read your contracts and have them reviewed by an expert prior to signing – but as many of us have found out the hard way, it’s not always possible to view a copy of the provider-facing network agreement. If the payor agreement that you sign talks about billing standards, make sure they’re clear and unambiguous; if it doesn’t, try asking to see the provider agreement. The worst anyone can say is no.

Food for thought: if you’re being asked to sign your name to terms that are clearly ambiguous, or terms the other party won’t even show you, maybe that vendor is not the right fit for your business…