Example of Hold Harmless Clause for Business Contract

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					       American College of Radiology Managed Care Committee / Radiology Business
                  Management Association Payor Relations Committee

                                                          Contract Evaluation Checklist

                                                                       Table of Contents


  I. Evaluating Compensation .................................................................................................................................. 2
     1. Compensation ................................................................................................................................................ 2-3
     2. Other Points to Consider When Evaluating Compensation………………………………………………... 3-4

 II. Evaluating General Contract Provisions ............................................................................................................. 4
     1. The Plan ........................................................................................................................................................ 4
     2. Affiliations .................................................................................................................................................... 4
     3. Term/Termination ............................................................................................................................................. 5
     4. Credentialing ................................................................................................................................................. 5
     5. Sites of Service .............................................................................................................................................. 5-6
     6. Material Changes and Notification…………………………………………………………………………. 6

III. Negotiating Issues Surrounding Claims Processing, "Clean Claims" and Audits .............................................. 6
     1. The Legal Environment ................................................................................................................................. 6
     2. General Recommendations Surrounding Claims........................................................................................... 6-8

IV. Negotiating Utilization Review/Utilization Management and Pre-certification Stipulations ............................. 8-10

V. Negotiating Dispute Resolution .......................................................................................................................... 10
   1. Arbitration ..................................................................................................................................................... 10
   2. Binding Arbitration ....................................................................................................................................... 10
   3. Proposed Hold Harmless and Indemnification Clause .................................................................................. 10
   4. Authority to Negotiate ..................................................................................................................................... 11


***Please Note: The Managed Care Committee of the American College of Radiology and the Payor Relations Committee
of the Radiology Business Management Association have provided a Contract Evaluation Checklist for ACR and RBMA
members to use strictly as an educational resource. To avoid legal liability, members should not use any recommendations
offered in the Checklist in whole or in part to take collective action with other radiology group practices in negotiations
with managed care organizations (MCO) or other third party payers. Specifically, members should never coerce an MCO
or other third party payer to agree to certain fee-related terms by, e.g., implying or threatening a boycott. Each ACR and
RBMA member individually must make contract-related decisions with MCOs and other third party payers.
     American College of Radiology (ACR) Managed Care
       Committee / Radiology Business Management
      Association (RBMA) Payor Relations Committee
           CONTRACT EVALUATION CHECKLIST
    _______________________________________________________________________


Ideal contracts between physicians and Managed            It is important to note that the use of Medicare
Care Organizations (MCOs) should recognize and            allowables as a reference point for evaluating
meet the needs of both parties. The following is a        compensation is not always the most appropriate
list of some issues to consider when evaluating a         comparison to be made. There are inherent risks in
proposed managed care contract. It is not intended        signing a contract in which the compensation is
to be exhaustive; there are many other issues that        linked directly to the Medicare fee schedule.
must be reviewed and evaluated prior to executing a       Accepting a fixed relationship of a fee schedule to
managed care contract. In evaluating a proposed           the Medicare fee schedule can result in year-to-year
contract, the radiology or radiation oncology group       changes in reimbursement without renegotiation
should assess the relative strength of its negotiating    based on national decisions beyond your control.
position and the issues that it considers most            For example, based on the 2002 National Medicare
important. In using this checklist, the group should      Physician Fee Schedule, Medicare allowables were
therefore distinguish between contract provisions         drastically and inappropriately cut by a 5.4%
which it considers critical (e.g. “deal breakers”) and    reduction in the Medicare conversion factor for all
those that it considers more negotiable. The group        of medicine and by substantial reductions (5-7%) in
should seek the advice of legal professionals when        the practice expense Relative Value Units (RVUs)
considering a contract negotiation.                       throughout the diagnostic radiology and radiation
                                                          oncology family of codes. As such, please carefully
I. Evaluating Compensation:                               consider this when using Medicare allowables as a
                                                          reference point for compensation.
1. Compensation:
When evaluating a contract, the radiology or              An alternative is to use the below calculation not
radiation oncology group should first identify the        only as a comparison, but to construct an entire
payment method the plan/plans under consideration         payment schedule, CPT® by CPT®, and use that as
would use to determine compensation. The group            the fees for the length of the contract. Then attach
should evaluate the proposed reimbursement                that fee schedule to the contract in its entirety.
mechanism, how their case mix relates to the
proposed reimbursement structure and how this in          Determining the Medicare Multiple of the
turn fits into the group's overall business plan. Since   Proposed Payment System:
Medicare allowables are readily available, non-           If the payment system is “fee for service, a
proprietary information, they are often used as a         reimbursement mechanism under which medical
reference point when evaluating other payment             providers are paid for each service they provide,
methods. It can therefore be valuable to know how         please see Steps 1, 2, 3 and 5. If the payment system
the plan's reimbursement structure and fees for each      is capitated, please see Steps 4 and 5.
given service (i.e. allowable fees) compare to what
Medicare allows for the same given services (i.e.         Step 1
Medicare allowable). THIS COMPARISON IS                      Determine if the fee schedule conforms to the
NOT INTENDED AS A RECOMMENDATION                             Medicare Resource Based Relative Value Scale
TO LINK THE COMPENSATION OFFERED IN                          (RBRVS):
THE CONTRACT TO THE MEDICARE                                 • Use the attached spreadsheeti, created by a
ALLOWABLE.                                                     radiology business manager working with the



2
      ACR Managed Care Committee, to determine                    Medicare average and not locality specific, so
      a Conversion Factor (CF) for each of the most               will not yield as relevant information as the
      common procedures in your practice. Please                  local Medicare CF will.
      see the directions outlined on the attached
      spreadsheet.                                           Step 3
    • If this CF is generally the same for all                  Determine the MM when the proposed fee
      procedures, then the fee schedule conforms to             schedule does not conform to RBRVS:
      RBRVS (i.e., Medicare uses one conversion                 • If the CF obtained in Step 1 exhibits a wide
      factor to determine payment for all procedures,             range for different CPT ®codes, then the fee
      therefore if the MCO conversion factor is                   schedule does not conform to RBRVS. In this
      generally the same for all procedures it                    case, the MM can be calculated by dividing the
      conforms to the RBRVS methodology).                         insurer conversion factor (ICF) determined in
                                                                  the volume weighted (VW) box at the end of
     The below table shows the Medicare fee                       the spreadsheet, by the published Medicare CF
    schedule conversion factors for 2000-2005, along              for the current year.
    with the percent impact on radiology and
    radiation oncology. When evaluating the                  Step 4
    contract, it is often easier to select a baseline year      Determine the MM when the proposed fee
    by which to compare. Keep in mind that the                  schedule is capitated (please note, the attached
    conversion factors and percent impacts are                  spreadsheet is not used in this step):
    national averages. The Medicare fee schedule                • If compensation is capitated, first divide the
    includes a separate table of Geographic Practice              total capitation payment by the total Relative
    Cost Indices (GPCIs) that must also be factored               Value Unit (RVU) for all exams provided for
    into the equation.                                            the same time period in order to determine a
                                                                  CF. Then divide that CF by the Medicare CF
                                              % impact            in order to determine the MM.
                               % impact       on
              Conversion       on             radiation      Step 5
              Factor           radiology      oncology          Determine MM for all plans in question (please
     2000         36.6137             1%             3%         note, the attached spreadsheet is not used in this
     2001         38.2581             6%             3%         step):
     2002         36.1992            -1%            -2%
                                                                • If the MCO has different plans (see The Plan
                                                                  section below), determine the Medicare
     2003         36.7856            -4%            -3%
                                                                  multiple for:
     2004         37.3374            -5%            -5%
                                                                     Preferred Provider Organization
     2005         37.8975             2%             1%               (PPO) ______
                                                                     Point of Service (POS):______
                                                                     Health Maintenance Organization
Step 2
                                                                      (HMO): ______
   If the proposed fee schedule conforms to the
                                                                     Any other: ___________
   Medicare RBRVS, determine the Medicare
   multiple as outlined in this step. If the proposed
                                                             2. Other Points to Consider when Evaluating
   fee schedule does not conform to the Medicare
                                                             Compensation:
   RBRVS go to Step 3.
   • Determine the Medicare multiple by dividing
                                                                The MCO should pay the radiology or radiation
      the CF you just obtained in Step 1, by the
                                                                oncology group at a competitive market rate for
      published Medicare CF, for the current year. It
                                                                the locality of the group in question.
      is important to note that the published
                                                                The group should be wary of “flat fee” or “global
      Medicare CF is dependent on geographic
                                                                payment” arrangements, which pay a single fee
      locality and is published by your local
                                                                for all exams within a given modality (e.g. CT).
      Medicare Carrier. Therefore, you must select
                                                                Accepting such an arrangement could lead to an
      the correct Medicare CF for the group in
                                                                economically adverse selection of the most
      question. The national published Medicare CF
                                                                complex procedures within that modality. Also
      may be used. However, this value is a national


3
    beware of language that indicates payment on a             from requiring physicians to accept “all
    per diem for all exams within a given modality.            products” clauses in managed care contracts.
    In a capitated agreement it is often possible and          Other states such as South Carolina and Texas
    desirable to “carve out” certain procedures such           have introduced legislation to ban the clauses.
    as interventional studies, mammography, or MRI             The MCO should not have the ability to sell the
    from capitated arrangements. The parties should            contract (or specifically the fee schedule) to
    agree in writing that those procedures would be            another party without permission of the group.
    paid on a fee for service basis and specifically           Referring physicians should be permitted to refer
    how that fee will be determined. In addition, new          patients to any contracted provider within the
    procedures or new uses for established                     plan.
    procedures cannot be included in an existing               Some payors use Radiology Benefit
    capitation arrangement.                                    Management Companies (RBMCs) to steer
    “Accepting assignment” is not necessary when               patients to favored providers. The provider may
    the provider has a contract with the MCO that              get many or few patients depending on the
    requires payment to the provider. “Accepting               payor's perception of provider's practice
    assignment” on a claim indicates that the                  attributes (price, location, services offered).
    provider is placing themselves in the position of          Therefore, provider should specifically ask if
    the patient and this has specific legal                    payor uses or plans to use RBMCs and deal
    consequences that can preempt the language in              directly with the issue in the contract. If so, you
    the contract and make it more difficult to enforce         may want the contract to become effective only
    the contract.                                              after payor or RBMC has
    Beware of language that bases the provider’s fee           referred a minimum volume of business.
    schedule on a fee schedule that is established by          Alternatively, provider could propose a tiered
    the MCO and allows the MCO to modify at their              payment schedule based on volume level.
    discretion. These modifications will not be in
    the provider’s favor and the provider will have         2. Affiliations:
    lost control over the expected reimbursement. If
    this situation is a requirement of the contract, be     The MCO may subcontract some functions such as
    certain to negotiate written notice of changes and      claims processing, coordination of benefits, and
    a short term cancellation.                              utilization management. Sometimes these functions
     You may propose that any significant changes           are plan-specific. MCO may serve as Third Party
     to the payment schedule must be overall                Administrator (TPA) for self-insured plans.
     payment neutral – i.e. a reduction of payment              The group should require that the MCO notify
     for one code should have a payment neutral                 them of the MCOs affiliations, sub-contractors,
     increase in payment for other codes.                       etc. prior to contract ratification.
                                                                The MCO, when it contracts directly with the
II. Evaluating General Contract                                 group, should retain the ultimate responsibility
                                                                for claims payment under the provisions of the
    Provisions:                                                 contract. Specifically, the MCO should not avoid
1. The Plan:                                                    its responsibility for claims payment because of
                                                                affiliations, subcontracts, or delegation of
The contract should specify which plan/plans are
                                                                payments to other third party administrators, etc.
covered in the contract. If plans are altered or new
                                                                The payment schedule should be the one
plans are added by the MCO, the group should have
                                                                contracted with the MCO, whether or not the
the right to opt in/opt out of those plans. If a specific
                                                                contract is serviced by a RBMC.
plan refuses to abide by the contract, the group
                                                                Should the group change its legal status (i.e.
should be able to terminate that plan without
                                                                from a professional corporation to a LLC) the
consequence to other plans in the contract.
                                                                status of the contract should not change as long
   “All products” clauses, which require the
                                                                as the make-up of the group does not
   radiology or radiation oncology group to accept
                                                                substantially change.
   all plans, including indemnity and newly
   developed plans, should be avoided. Alaska,
   Kentucky, Maryland, Minnesota, Nevada and
   Virginia have outlawed or restricted health plans


4
3. Term/Termination:
When negotiating a contract it is important to          4. Credentialing:
consider a short term contract as compared to a long       It is important to note that some insurers and
term contract. The following are some positive             some radiology or radiation oncology groups
aspects of both short and long term contracts for          have standard credentialing forms. Some states
your consideration. The group should consult a legal       are also legislating use of common credentialing
advisor to discuss the potential risks.                    forms. During contract negotiation,
   Short-Term Contract:                                    credentialing processes should be discussed. The
   • Enables the group to remain competitive with          group and the MCO should identify in writing a
     marketplace pricing. This is positive,                mutually agreeable, credentialing form.
     particularly if the marketplace pricing is            It is recommended that the group negotiate a
     increasing.                                           specific timeframe in which the MCO must
   • Enables the group to react to resource changes        review and accept or deny the completed
     not originally anticipated (i.e., radiology or        credentialing application. The group should try
     radiation oncology shortages).                        to get the MCO to guarantee enrollment of the
   Long-Term Contract:                                     radiologist or radiation oncologist within 90
   • Avoids renegotiation sessions, which can be           calendar days of submission of the completed
     time consuming and result in declining                application if the application meets credentialing
     reimbursement if original rates were well             requirements. If enrollment is delayed beyond 90
     positioned.                                           calendar days, the MCO should guarantee
   • Allows longer horizon for staffing and other          payment of any claims submitted by the
     resource demands.                                     applicant back to the date of submission of the
   Evergreen Agreement:                                    credentialing forms.
   • If the group must sign an Evergreen                   For hospital based radiologists or radiation
     agreement, whereby the contract is                    oncologists, the MCO should guarantee payment
     automatically renewed unless terminated or            of all claims between the time medical staff
     modified, the group should try to negotiate a         privileges are obtained and the time of
     process for regular fee reviews and                   enrollment.
     adjustments. At a minimum, the group should
     require advance notice of proposed fee             It is important to note that the National Committee
     changes with a reasonably short termination        for Quality Assurance (NCQA) standards may
     period, e.g. fees announced 90 calendar days in    dictate what insurers do in regards to credentialing.
     advance of changes, with a 60 calendar day         This should be taken into consideration when
     termination, leaving the group 30 calendar         reviewing contracts. [please refer to www.ncqa.org
     days to evaluate the effect of such changes.       for further information on NCQA credentialing
   • If the contract automatically renews, as with an   standards.]
     evergreen agreement, the contract should
     provide for cost of living adjustments in          Should a practice employ NP’s, RA’s, PA’s,
     reimbursement rates.                               physician extenders, etc. and there be a requirement
   Other Items to Consider for Term/Termination:        by the MCO that credentialing be necessary for
   • 90 calendar days written notification for          these providers, the above recommendations should
     termination by either party without cause.         apply equally to these auxiliary health care
   • Immediate termination by either party for          providers.
     cause – breach of contract – with opportunity
     to correct the breach within 30 calendar days      5. Sites of Service:
     of written notice.                                    The group should reserve the right to determine
   • Short termination timeframe for non-payment.          which of its locations should be included in the
     For example, if the insurer stops paying the          contract.
     group, the group must have the ability to             The group should negotiate the ability to add
     extricate themselves quickly. For example if          additional sites and remove existing sites, during
     the percentage of paid clean claims submitted         the term of the contract, at the discretion of the
     falls by more than 10% there should be a right        group. The contract should also allow for the
     to terminate within 30 calendar days.


5
    group to expand its activities (i.e. if the group         Billing personnel should also be aware of the
    opens a new practice site during the contract, this      specific precepts of these regulations, which may
    site should be included in the contract).                also limit the length of time a payer has to
                                                             dispute a claim. In some instances the time
                                                             frames for both dispute notification and claims
6. Material Changes and Notification:                        payment is shorter for electronic submissions
                                                             versus paper submissions.
    Should either party wish to make changes to the
    contract, including financial issues, they must       Class Action Lawsuits:
    notify the other party by certified mail, or some        In addition, many large MCOs are currently
    other form of mutually agreed upon notice               undergoing, or have recently settled, major class
    (website notice is not considered acceptable).          action settlements that require them to abide by
    All material changes should require an agreed,          certain payment rules with regards to bundling,
    written approval signed by both parties.                recognition of add-on codes, etc. However, the
    If this is not possible, the contract should state      settlement language may include an exception
    that the MCO will notify the group in writing of        that makes it possible for the MCO to work
    any material changes to the contract within 60-90       around these payment rules in order to correct
    calendar days of the change taking place, and the       suspected inappropriate or fraudulent billing
    group should have the right to refuse such              practices. The physician group should be aware
    changes in that 60-90 calendar day timeframe.           of the recent class action settlements and those
                                                            forthcoming so that they do not sign a contract
                                                            that prohibits them from holding the insurer to
III. Negotiating Issues Surrounding                         the payment policy terms outlined in the
Claims Processing, "Clean Claims"                           settlement. You may want to add "No contractual
                                                            clause will serve to reduce the benefits and/or
and Audits
                                                            responsibilities provided for in the applicable
                                                            Class Action Lawsuit settlement of 200X."
The purpose of this section is to ensure that both the
radiology or radiation oncology group and the MCO
have a mutual understanding of claims processing
                                                          2. General Recommendations Surrounding
issues, including the definition of a clean claim,
                                                          Claims:
time frames for submission and payment of a clean
claim, and mechanisms for dispute resolution, audits
                                                          Claims submission Form:
and refunds, if appropriate.
                                                             HIPAA standardization requires the most current
                                                             CMS 1500 form for physicians. Hospitals
1. The Legal environment
                                                             continue to use the UB-92 forms. Regardless of
                                                             the form used, the group and the payer should
Prompt payment laws:
                                                             agree on the format at the onset of contract
                                                             negotiation.
    Most states have prompt payment laws, by which
    insurers must abide. These laws specify how
                                                          Definition of a “Clean” Claim:
    quickly the MCO must render payment
                                                            The definition of a “clean” claim is often not
    following the submission of a clean claim and
                                                            specified. As such, the group should request that
    may indicate how quickly a claim should be
                                                            the MCO define and enumerate all elements of a
    submitted as well. When negotiating contracts it
                                                            “clean” claim at the time of contract negotiation.
    is important to understand your state’s prompt
                                                            It is recommended that the contract stipulate that
    payment law and the conditions outlined in that
                                                            the group receive written notification of any
    law. Be wary that your contract with the MCO
                                                            changes to the originally agreed upon definition.
    may release them from your State’s Statute,
                                                            It is important to note that state prompt payment
    allowing them longer to pay and tilting the
                                                            legislation may also define what constitutes a
    playing field in their favor. You may want to add
                                                            “clean” claim. As such, it is important to review
    "No contractual clause will serve to reduce the
                                                            the prompt payment law in your state to
    benefits and/or responsibilities provided for in
    the applicable state prompt pay laws."


6
    determine if the definition of a clean claim is       submitted. A recommended timeframe is within
    included in the legislation.                          180 calendar days of service.
                                                          EOBs should be in a standard format and
CPT®:                                                     preferably electronic so they can be easily filed
  The MCO should recognize all procedures AS              with the patients claim and appropriate actions
  described in the most current version of the            taken (i.e. closure of claim, appeal, balance bill
  Physicians Current Procedural Terminology               the patient, etc).
  (CPT®)ii book and all subsequent CPT® code
  updates on their effective dates (MCO sometimes      Denials:
  recognize the CPT® codes, but create their own         The group and the payer should agree on a
  interpretation of the descriptors rather than          specific timeframe in which the MCO may reject
  adhering strictly to CPT®). This includes              a submitted claim. A recommended timeframe is
  Category I codes (standard codes), Category II         within 180 calendar days of submission
  codes (tracking codes), and Category III codes         (symmetric with claims submission).
  (codes under evaluation). Methods to negotiate
  payment for CPT® category III codes should be        For “clean claim”:
  outlined.                                              If the MCO notifies the group that the claim
  All modifiers should be recognized, or at least a      cannot be processed because it does not contain
  list of those that will be recognized should be        all appropriate data elements, the MCO should
  negotiated. RE; The MCO should define their            allow sufficient time for the group to resubmit
  criteria for identifying multiple procedures or        the “clean” claim after notification that the claim
  bilateral procedures performed on the same day.        is not “clean”. The MCO should clearly identify
  To be clearer, the preferred method is by line         the missing data element(s) needed to process the
  item using the appropriate modifier (76,77,59,RT       claim.
  or LT).
  Unlisted procedure codes (-99) should also be        For medical necessity: (for retrospective denials
  recognized and a method outlined to negotiate        see “Audits” below and /or section IV)
  payment, usually in advance of the procedure.           If the MCO notifies the group that the claim
  HCPCS codes which allow for billing of                  cannot be processed because the diagnosis does
  additional costly items (i.e. contrast) in certain      not meet medical necessity, the group should
  procedures should be recognized and payment             agree on a process to appeal this decision. This
  negotiated.                                             may require additional research, acquiring
  ICD-9 codes: The MCO should accept all                  reports and even hospital records. (See appeals)
  current ICD-9 codes based on the current                Before signing a contract, the MCO should
  publication. They should allow up to four (4)           disclose all medical policies currently in place. If
  diagnoses per line item.                                they add a policy after your contract is in place,
  The contract should prohibit the MCO from               you should be given proper notice to challenge
  down coding or bundling the coding submitted            or opt-out of the contract if you do not agree
  by the group. The group should avoid bundled            with the policy. For instance: Contiguous Body
  coding by an MCO particularly because that              Part reductions.
  action might well implicate the group in fraud
  and abuse legal issues. The MCO should not           For precertification issues:
  change the information provided on the claim.          If claims are denied in the hospital setting, you
  CCI: Correct Coding Initiative current                 should try to negotiate that the professional fee is
  publication should be accepted and followed by         paid in the hospital inpatient, outpatient and
  the MCO. The MCO should not add bundling               emergency room settings, since the
  edits that are in excess of the current CCI. It is     precertification process is beyond your control.
  suggested that you add this directive in your          If precertification is demanded and obtained, the
  contract language.                                     claim should always be paid.
Submission Time Frame:
  The group and the payer should also agree on a
  specific timeframe in which the claim must be



7
Concurrent Care:                                             the MCO’s auditing processes and limit the
  There is a growing trend among ER physicians               MCO’s ability to audit in certain situations. The
   to submit claims for the reading of exams                 group should obtain the documentation used by
   performed in the ER. It is suggested that your            the MCOs for their audits to ensure the correct
   contract protect you from denials related to              documentation is used. Outdated and wrong
   concurrent care. The MCO should agree that                documentation could result in significant losses
   they will pay radiologists for the reading of             and those may be recouped if successfully
   radiology exams in the hospital locations.                challenged.
                                                             For example, an insurer will typically propose
Appeals:                                                     unlimited access to the group’s medical records
  It is recommended that the group negotiate to              in the contract. Unlimited access is not
  resubmit the claim within 90 calendar days. It             recommended as it can disrupt the group’s
  should be outlined in the contract that the MCO            business, violate confidentiality, and leave the
  will then pay the resubmitted claim within a               group with large bills for overtime,
  certain timeframe. It is recommended that the              photocopying, and shipping costs. Negotiate
  group negotiate with the plan and agree to have            clear-cut limits for access to the group’s records
  the Plan pay or respond to the claim within 15             including payment by the MCO for copying and
  business days of the MCO's receipt of the                  shipping costs, obtaining consent from the
  resubmitted claim.                                         member, allowing access to relevant records
  If the MCO delays processing the resubmitted               only, requiring adequate notice, allowing access
  claim, it is recommended that the group negotiate          only during regular business hours, and
  to have interest accrue during this time. A                restricting access to mutually convenient times.
  specific interest rate should be stated in the
  contract unless there is a prompt payment state
  law to take precedence.                                 IV. Negotiating Utilization Review
                                                          (UR)/ Utilization Management (UM)
Claim Refunds:
   In general, it is recommended that recoupment          and Pre-certification Stipulations:
   of payment for services performed should not be        Managed care organizations often implement
   permitted. If necessary, the group should review       programs to control high-tech imaging utilization.
   the MCO’s processes for recouping funds from           These programs are often managed by separate
   the group if a refund is due to the MCO. When          entities called radiology benefit management
   negotiating issues surrounding claim refunds it is     companies (RBMs) often hired by the MCO to
   of benefit to the group if the MCO agrees to the       manage radiology hi-tech imaging utilization.
   following:                                             RBMs are hired to educate the referring physician
    The group should have the ability to                 on the appropriateness of ordering hi-tech imaging
       challenge a demand for re-coupment.                procedures for their patient’s sign, symptom or
    MCO should not recoup funds from future              diagnosis. Some MCO’s also implement their own
       payments to the group without first requesting     internal utilization programs by requiring prior
       a refund from the group and allowing 60            authorization or pre-certification prior to ordering
       calendar days for receipt of funds requested.      the high-tech scan. During contract negotiations all
    The timeframe for requesting refunds should          utilization management terms, conditions and
       be limited. Limiting to one year is preferable.    processes should be clearly defined prior to contract
       If possible, link this to the claims submission    ratification. Once all utilization review policies are
       timeframes and make it a symmetrical               defined, the group must decide if they are willing to
       process, with the group and the MCO having         participate in them. If the group agrees to
       the same time frames for submitting claims.        participate, they should negotiate the following
       State law may dictate the timeframe for            terms:
       requesting refunds under its prompt payment
       legislation.                                      1. Participate in all Utilization Review (UR) /
                                                            Utilization Management (UM) policies of the
Audits:                                                     plan that are provided in writing at the time of
  It is strongly recommended that the group review          signing the contract. The group should negotiate


8
   an option to review and refuse any new UR/UM             The pre-certification and prior-authorization
   policy proposed during the life of the contract.         policies should exclude all emergency room and
2. It is recommended that the group negotiate with          in-patient procedures.
   the MCO and agree in writing that new                    The pre-certification should cover a “family” of
   procedures or new uses for established                   codes and not a specific CPT® code. For
   procedures cannot be included in an existing pre-        example the “family” of codes would consist of
   certification or prior-authorization program             CT Head without contrast, CT Head with
   without prior notification.                              contrast and CT Head with and without contrast.
3. The MCO should not be given the ability to               Most MCOs have the ability to require the RBM
   recoup funds previously paid to the group                to structure a high tech imaging pre-
   because of a retrospective UM decision.                  certification/authorization program that utilizes
4. If the group agrees to any UR/UM reporting, it           the “family” of codes approach rather than the
   should negotiate reasonable, verifiable payment          CPT® specific approach.
   for these services commensurate with time, effort        Radiology groups should try to educate and
   and costs involved.                                      influence the MCO directly on the following
                                                            points if they are attempting to use a CPT®
 If pre-certification policies cannot be negotiated out     specific pre authorization program:
 of the contract, the following should be discussed          The CPT® specific pre authorization program
 and clarified with the MCO to avoid unnecessary                employed by some RBMs does not promote
 denials:                                                       quality healthcare. It provides the imaging
     All pre-certification policies must conform to             provider with the clear incentive to only
     state and federal law and specialty specific               perform the exam exactly as ordered and pre
     guidelines for utilization management (i.e. ACR            authorized, otherwise the imaging provider
     guidelines).                                               must provide costly administrative over-head
     All pre-certified procedures should be paid, even          or risk not being paid.
     if the MCO later discovers that the member was         Radiologists are trained to assist in
     not enrolled at the time pre-certification was             determining the most accurate study to
     approved.                                                  answer the clinical question efficiently.
     When the radiologist is not in control of the pre-         Frequently, the findings at the time of the
     certification process, the professional component          initial study will indicate that an additional
     of the procedure should be paid by the MCO                 view be taken or the need for contrast. A
     regardless if the claim is denied on the basis of          radiologist that is on site can make these
     pre-certification reasons.                                 determinations. A CPT® specific pre
     To the extent permitted by state and federal law,          authorization approach does not allow the
     the group should negotiate the right to bill the           radiologist to make these determinations and
     patient, without prior notification, if payment for        use his/her clinical judgment.
     the professional component (PC) is denied on the       Negotiate a time frame following a patient’s
     basis of pre-certification or medical necessity.       procedure within which the original pre-certified
     The group should evaluate the merits of all            CPT® code and diagnosis can be changed. In
     written pre-certification policies for submission      most instances this would be a 48 hour window
     of global bills (i.e. combined professional and        (business days) from the completion of the exam.
     technical) and if accepted, should abide by them.      Add on codes like 3D Reconstruction, CPT®
     The group should be held harmless for any              code 76377 should not require a pre-certification
     miscommunication of pre-                               or prior authorization.
     certification/authorization payment policies           The group needs to be aware of the pre-
     between the MCO and the RBM.                           certification validation period. Determine when
    The group should negotiate with the MCO and             the validation start date begins and ends. The
     agree in writing that the MCO will not issue any       life span of most validations is 45 to 60 days
     retrospective denials on procedures that have          from the date one is granted or from the date the
     been pre-certified regardless of medical necessity     exam is scheduled. If the exam is rescheduled
     payment policies.                                      out side of the validation period, internal systems
                                                            would need to be in place to ensure a new pre-
                                                            certification is issued or re-validated. The



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     professional component should be excluded from           with expenses being shared equally by both
     the validation period. In a hospital based setting       parties.
     the radiologist has no control over the internal         Identify under which state law the agreement
     systems.                                                 will be interpreted (preferably the state in which
     The group should negotiate a cap or pre-                 the group practices).
     determined time period to which a pre-                   Identify where arbitration will occur. Otherwise,
     certification process should continue to be              the MCO may try to arbitrate in another state
     effective in managing utilization.                       knowing it will be a great burden on the group.
     In some MCOs, a score card or pre-defined
     standard has been developed to measure the
     physician’s quality, efficiency of care and           3. Proposed Hold Harmless and
     appropriateness of ordering high-tech radiology          Indemnification Clause:
     procedures. Upon meeting the RBM or MCO’s             Contracts between group(s) and plan(s) typically
     standard for appropriate use of high-tech imaging     contain indemnification, or hold harmless, clauses.
     services, then the referring physician should be      In the sample clause below, each party agrees to
     exempt from requiring a pre-certification for all     hold harmless from liability under the contract the
     his/her patients. The group needs to be notified,     other party for certain acts or omissions caused
     perhaps quarterly, of who these “gold card”           solely by the first party. For instance, the MCO
     physicians are.                                       would agree to indemnify group members from
                                                           liability arising out of any negligent act or omission
                                                           that the MCO’s agents or employees solely cause
V. Negotiating Dispute Resolution:                         (e.g., inaccurately processing claims). Similarly, the
1. Arbitration:                                            group members would agree to indemnify the MCO
                                                           from liability for any negligent act or omission that
     The contract should outline a mutually agreed         group members solely cause that relates to patient
     and clearly defined dispute resolution process        care services members provide. However, the
     with a defined time period.                           indemnification clause would not protect the group
                                                           against liability for its own or joint negligence even
2. Binding Arbitration:                                    if the MCO also was negligent, nor protect the MCO
     Binding arbitration will almost certainly be          against its own or joint negligence even if the group
     proposed by the MCO, largely precluding any           also was negligent. Group members should review
     chance to use the court system to settle              an indemnification clause for state law issues with
     contractual disputes. There are positive and          their legal counsel and insurance carrier before
     negative aspects to both systems and the group        agreeing to include it in a managed care contract.
     should carefully consider these positives and
     negatives.                                            An Example of a Hold Harmless and
     If the group ever has to go to arbitration, it is     Indemnification Clause (RG – radiology or
     almost always the physician arbitrating against       radiation oncology group)
     the insurer for a decision the insurer made
     (payment, coverage, etc.). Rarely will the insurer    “__(RG)__ agrees to indemnify, except for attorney
     initiate arbitration. For this reason, the group      fees and/or related legal expenses, but not defend,
     should make certain this section is written fairly.   __(MCO)__ with respect to liability arising out of
     The group should be wary of a single arbitrator       any negligent act or omission caused solely by
     arrangement. A neutral three-person panel is apt      __(RG)__ related to medical services to patients
     to be more uniformly fair. It is recommended          rendered under this contract; but it is further agreed
     that the group select, with the MCO, an               that such indemnification shall not protect
     arbitration panel recognized by the American          __(MCO)__ with regard to liability based upon the
     Arbitration Association.                              negligence or the joint negligence of __(MCO)__.
     The group should consider the positive and            __(MCO)__ agrees to indemnify, except for
     negative aspects of seeking expenses for the          attorney fees and/or related legal expenses, but not
     winning side and of seeking punitive damages.         defend, __(RG)__ with respect to liability arising
     The MCO will likely support exclusion of both         out of any negligent act or omission caused solely
                                                           by agents or employees of __(MCO)__; but it is


10
further agreed that such indemnification shall not
protect __(RG)__ with regard to liability based upon
the negligence or the joint negligence of __(RG)__.”

4. Authority to Negotiate:
In many managed care environments, including the
group in a Physician Organization (PO), Physician
Hospital Organization (PHO), Independent Practice
Association (IPA), or other provider organization
dictates that contracts are negotiated by the provider
organization. In these situations, the radiologist or
radiation oncologist is strongly advised to become a
central member of the provider organization’s
contracting committee.

The group may need to “opt out” of the PO or PHO
contract presented (if this is permitted within the
framework of the PO or PHO) especially if the
group's own MC contract is more advantageous to
the group. The converse may be true as well. The
PO or PHO negotiated contract may be better for the
group than its own contract. The group would then
need to terminate its own contract under the
termination provisions. Either way, the group should
address this situation before signing with a PO,
PHO, or MCO.


i
     Michael Bohl, a radiology business manager who worked
      with the ACR managed care committee, created the
      spreadsheet referenced in this document.
    ii
      Physicians Current Procedural Terminology (CPT®) is a
    registered trademark of the American Medical Association
    (AMA)




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DOCUMENT INFO
Description: Example of Hold Harmless Clause for Business Contract document sample