Getting Paid: Five Tips For Managing And Collecting Business Receivables
As our medical practice group clients know, we commonly recommend against joining or maintaining membership in the various preferred provider organization (PPO) networks that operate in the worker’s compensation field. While network membership gives payors the right to reduce reimbursements to absurdly low levels, the practice group sees nothing in return. In particular, the increase in referral volume common to group health insurance network membership is simply not seen in the worker’s comp field.
For those who see some reason to remain “in network,” however, close scrutiny of PPO contract documents is imperative. The form documents are terribly lopsided, and indeed, often include clauses that catch providers completely by surprise.
No one should ever sign a contract document without reading it carefully and understanding it. If a PPO network furnishes a document that is too long or complex to understand, then you should avoid signing unless and until they negotiate changes that simplify and clarify the relationship. And make no mistake, our experience demonstrates that networks will negotiate contract terms.
To give an idea of what goes on in these documents, consider these examples of problems we frequently find in PPO relationships:
- The primary offense of networks is with contracting with individual providers, instead of through the business or billing office or practice manager. The practice group will lose all control over management of receivables if it does not clamp down on personnel signing documents willy nilly. Bear in mind that these contracts can remain in effect until someone acts to terminate them, so we often see networks relying on documents that are decades old. Networks also take the position that the contracts follow a particular provider even as he may change practice group affiliations, so any group taking on a lateral hire should take care to assure that he is not bringing a PPO contagion with him.
- Some contract forms go on to specify that the network will process billings according to the provider’s taxpayer identification number (TIN), and that for their convenience, anyone billing using the same TIN will also be considered “in network”. If an individual provider signs intending only to bind himself, the network may well consider the entire practice group thereby bound, since all billings use the practice group’s TIN.
- Many contracts provide an onerous and overly lengthy process for terminating the relationship. If you find yourself in a bad deal, you may have a very long time before you can get yourself separated. When contract documents are aged or have perhaps become lost, it can be difficult to know if you are sending your termination notice in the manner required by the contract. We have seen networks actually receive termination letters and refuse to act on them because they contend they were not properly sent. Worse, we find that networks commonly ignore termination letters until forced to acknowledge them through the practice group’s pressing claims for underpayment.
- Beware of the fine print when negotiating reimbursement rates. Standard language buried in the document will allow them to pay you the lesser of any negotiated rates, or their internal fee schedules. If you do not find that language and strike it from your document, any better reimbursements you negotiated may not be worth the paper you wrote them on.
- Similarly, contracts often contain language that will subject you to industry practices that are otherwise not in accord with the precedents of the Virginia Worker’s Compensation Commission. For example, the Commission commonly disallows claimed multiple procedure discounts, but contract documents almost always find some way to give the network the right to take such discounts – and quite often, they do so in language that does not attract the provider’s attention.
- Another common clause allows the network the unlimited right to amend your deal simply by sending you a letter and then imposing on you the obligation to object by a stated deadline, or else your acceptance of the change is presumed. This leads to providers not really knowing what their contracts say, because often these letters are not recognized for what they are when the mail room opens them, and they therefore do not come to the attention of management personnel, nor find their way into the provider’s files. It can even lead to networks pulling you into their worker’s comp products after you had taken pains to exclude those plans from your relationship.
- Generally, our opinion is that any company that would do business in this way is unworthy of our clients’ trust. That reinforces our standard advice against even entertaining membership in these networks. But anyone still intent on joining a worker’s comp PPO network should, at the very least, (a) assure that the business office, and only the business office, handles all such contracts, and (b) consult with the group’s lawyers before signing, so as to assure that all offensive language is stricken and that the group actually gets what it thinks it has bargained for.
In addition, a sound record-keeping system is essential, so that you have a firm grasp of what deals you have, and have not made.