By: Pamela Tahim
1) Legally Required Amendments – 28 California Code of Regulations Section 1300.71(m) allows Qualified Health Plans (QHPs) to make material modifications to the underlying contracts so long as they provide 45 days advanced notice with the opportunity to terminate the underlying agreement if the physician does not agree. This is how QHPs are contracting with Physicians to be part of the Exchange, rather than by entering into new contracts.
a) Some Physicians are not aware that they are part of the Exchange and should confirm whether they received this Amendment by calling or emailing the QHPs. Physicians should also determine whether they agree to legally mandated amendments (i.e., to be part of Covered California and the applicable rate schedules.)
b) If a Physician does not agree to an amendment, the Physician should review the underlying contract with the QHPs to determine whether they have time to opt out of the amendment or the entire contract. If there is not time to opt out, Physicians should find out what other options they have.
2) Payment – QHPs will reimburse the Physician according to a fee schedule, typically attached to the Agreement. Language in Agreements: “In exchange for the provision of Covered Services to Members, QHP shall pay Provider the lesser of (i) the applicable reimbursement rates set forth in Exhibit B thereto, or (ii) Provider’s billed charges, in either case, less the Member’s applicable Copayment.”
a) Reimbursement rates may vary depending on the type of health plan the patient is enrolled in. Physicians are advised to get all fee schedules. Understand your patient population and the issues that will come from a different population from the Exchange, to make sure that the pricing is sufficient to cover costs. Physicians are recommended to check each Health Plan’s website on the first day of each calendar quarter for updated pricing.
b) Physicians are required to use their “best efforts” to accept electronic methods of payment and receive related explanation of benefits via electronic funds transfer. This means Physicians will need to take steps to make sure they can accept electronic methods of payment to prevent being in breach of the contract with the QHPs.
3) Physicians are Required to Collect Copayments, Deductibles and Coinsurance – Only Physicians are responsible for collecting copayments, deductibles, and co-insurance. This can create collections issues with grace periods under the ACA.
a) Physicians should be aware that depending upon the type of plan selected, a patient can have significant cost-sharing for copays and deductibles with an Exchange. This may result in greater incidence of bad debt and increased administrative costs due to increased collection efforts.
b) Physicians should require copays at the time of service.
c) Physicians should implement a policy to check the insurance eligibility of each patient prior to seeing them.
d) Physicians should implement a policy to require copayments and deductibles be paid prior to seeing a patient unless there is an emergency situation.
e) Physicians should consider hiring a billing/collection company to assist with the above.
4) Termination of Contracts – The contracts with the QHPs have two ways of terminating, either mutually without cause, or unilaterally if it is for cause. Generally, either party may terminate the contract without cause by providing fair written notice (typically 120 days prior). Generally the term of the contracts is for one year with automatic renewal annually.
If the termination is for cause, the QHP must give notice of deficiency to cure. There are provisions that allow for immediate termination, which Physicians should review and make sure they are aware of. Physicians can terminate the contract if a legally required amendment causes financial hardship. Physicians are advised to review termination clauses associated with exchange products carefully because for some contracts such as Blue Cross and Blue Shield, if they did not opt (in/out) prior to the deadline under the QHP, then they have to opt out of the entire PPO Plan.
5) Dispute Resolution Procedures – Contracts with the QHPs have specific dispute resolution procedures that require the Physician to first file a complaint with the QHP’s internal grievance department, meet and confer, and then use binding arbitration if not resolved by the prior methods. If the Physician does not follow this process, the QHPs can argue that the Physician failed to exhaust the administrative remedies and be barred from pursuing his/her claim.
6) Out of Network Referrals – Contracts with QHPs have very strict provisions regarding out of network referrals and it can be a breach of the contract with the QHP if it is not followed. Generally QHPs require Physicians to refer patients to participating providers unless written authorization has been granted in advance by the QHP, unless it is an emergency.
7) Nondiscrimination Clauses – Contracts with QHPs have nondiscrimination clauses so that Physicians cannot deny care to patients simply because they are enrolled in Covered California.
8) Compliance with state and federal laws – Physicians should be aware of their obligations to have an up to date Health Insurance Portability and Accountability Act (HIPAA) and Electronic Medical Records (EMR) compliant system or they will be in breach of the contract with the QHP.
9) Maintenance of Malpractice Insurance and Medical License – Physicians are obligated to maintain their medical license free from any restrictions or limitations and also to maintain medical malpractice insurance, or they will be in breach of the contract and could be terminated for cause without the ability to cure.
10) QHP’s Policies and Procedures – Physicians are generally required to comply with all QHP’s policies and procedures, so it is highly recommended that they obtain a copy of the QHP’s Provider Manuals and review them.