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10 Key Surgery Center Managed Care Contract Provisions and Terms to Know

Ken Bulow, COO of GENASCIS, identifies 10 key provisions and terms to look for in your surgery center's managed care contracts and offers recommendations for what you should expect under these terms.


1. All product clauses. These allow the payor to extend the contract to other payors."If your payor has affiliates, ensure your contract includes an addendum that list all affiliates upfront at the time of signing," Mr. Bulow says.


2. Filing limit. Request a minimum of 120 days. "It's also important to get an exception to the timely filing deadline for patients who provide inaccurate coverage information," he says.


3. Appeal limits. The recommended minimum is 120 days in which to file an appeal. "Payors like to set short timeframes," he says. "Don't allow it."


4. Timely payment. Though many states have their own laws pertaining to timely payment, your contract should define a payment as 15 days upon receipt of a clean claim that has no defect, impropriety or special circumstance and meets Medicare's guidelines for claim submission.


5. Recoupment time limits or takebacks. Avoid signing a contract that allows for unlimited overpayment recovery. Make sure there is a specific time frame in the contract — the shorter, the better. "It's only fair," says Mr. Bulow. "The payor puts a time limit on how long you have to file an appeal, so you should put a limit on the recoupment window."


6. HMO Withholds. Request no HMO Withholds. HMO Withholds are a cost containment feature incorporated into physician or facility contracts whereby the HMO withholds a portion of the agreed upon consideration and agrees to pay the amounts withheld back to the physician at the end of the year if the utilization of referral patterns have been favorable.


7. Contract term. Make sure you understand the contract terms. Do the rates increase year over year? Are you comfortable signing a three-year term, or are you better off with a one-year term?


8. Charge increases cannot exceed XX percent. You want no limit on charge increases. "As a facility, you have your own methods and reasons for establishing your chargemaster," Mr. Bulow says. "You cannot have a third party dictate what your charges can be and for that reason, we always recommend against charge limits in contracts."


9. Eligible charge. All charges for eligible procedures should be included. "Do not accept a contract with language about 'eligible charges' because you could end up providing approved services to a covered patient and the payor could tell you that certain of the procedures are not 'eligible' for reimbursement," he says.


10. Medical necessity. Make sure the contract clearly defines when authorization is needed for procedures.


Learn more about GENASCIS.


Read more from GENASCIS:


- How to Determine ASC Usual and Customary Rates for Out-of-Network Procedures: Q&A With Ken Bulow of GENASCIS


- 4 Best Practices to Control Labor and Supplies for Surgery Center Cases


- 4 Steps to Improve Collections Through Contractual Write-Offs

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