Contracts, Contracts, Contracts: They're What Matters Most
BY CLARKE D. NEWMAN, OD, FAAO
The French architect, le Corbusier, once quipped that, "God is in the details." Well, that may be true of modern architecture, but when it comes to contracts with medical insurance carriers, it's really the devil that's in the details. I've looked at 22 years worth of contracts between carriers and myself, and I've never seen God there.
I hear practice management gurus tell practitioners that they should do this or that, and the first thought that always comes to my mind is, "How do they know what to do? They haven't seen any of the contracts that the doctors have signed."
Truly, it doesn't matter what any of the gurus say — including me. It only matters what the provisions of the contract are.
Each time you sign on to provide services with a medical carrier for its subscribers, you enter into a contractual agreement with that carrier. Under that contract, there are covenants that bind each party to certain obligations. A failure of either party to honor those obligations results in a breach of contract, which is a tort or civil wrong. Within the contract there are remedies that are available to the other party in the event of a breach. Remember that.
When you sign a contract with a government carrier, like Medicare, the relief available to you when a breach occurs is administrative. The relief available to the government is criminal prosecution. Remember that as well.
Defining the Terms
In these contracts, terms are defined that shape the plain language of the contract. Within the framework of those definitions are provisions under which the services are provided by the practitioner to the subscriber, and provisions under which the carrier must compensate the practitioner.
These contracts also outline exemptions and exclusions. Mostly, exemptions relate to pre-existing conditions. Exclusions relate to services that are non-covered.
These terms contain a definition of medical necessity that we talked about in last month's column. The plans stipulate how to document medical necessity. Also, there are fee schedules that tell you what carriers will pay for a given service.
If the fees paid by the carrier for services or materials are horrible, then don't sign up. I throw contracts in the trash all the time. You don't have to sign every contract you're offered. Remember, we have to get paid.
You have to make a profit, and if the contract doesn't help you get there, then you should not sign it. Insurance companies trade on our own paranoia and the myth that if we don't sign a contract, then the next practitioner will and then take all our patients. If that were true, then why don't the bad plans have any practitioners on their panels? Inquiring minds want to know.
Understand Before You Sign
It should go without saying that you have an obligation to yourself, to your business, and to your family to read and understand every contract that you sign. Don't get hurried by life's intrusions and fail to perform this elemental duty. It will come back to haunt you — big time.
The other thing that goes without saying is that you have remedies available to you when these companies don't toe the line. Don't be afraid to stand up to insurance companies if they breach their contracts with you. Often, there are state laws to which they must conform. You should know these laws and your available remedies.
Next month, we'll look closer at exclusions and non-covered services. CLS
Dr. Newman has been in private practice in Dallas, Texas since 1986 specializing in vision rehabilitation through contact lenses as well as corneal disease management, optometric medicine and refractive surgery.