What to Consider When Contracting With Insurers

Time: Most contracts stipulate the fees that will be paid to in-network physicians for specific procedure (CPT) codes and which physicians will be paid for which CPT codes. For instance, prior to this year, some insurers reimbursed psychiatrists only for the psychiatry CPT codes, even though it was just as appropriate for psychiatrists to use the evaluation and management (E/M) codes (the 992xx series). Now that psychiatrists are required to use the E/M codes to code their medical work, it is essential that not only the codes in the psychiatry section of CPT be covered, but the E/M codes as well. The information about specific codes and their reimbursement rates is rarely found in the body of the contract you sign, but should be available in either the appendixes or attachments. Before you sign an initial contract or continue a current contract, be sure you find out which CPT codes you’re permitted to use and how much you’ll be paid for each code. Many contracts are “evergreen,” meaning they automatically renew unless you affirmatively terminate, even if an insurer unilaterally changes the rates to your detriment.

Place: Contracts should also stipulate the physician’s status with the insurer in various settings. Some contracts provide that an in-network psychiatrist is in-network at every place of service, while others may just be for a specific setting. This is an issue that has proved problematic for some APA members who practice in clinics where many forms of insurance are accepted and who also have private practices in which they do not accept insurance. If the clinic’s contract with an insurer says it covers the psychiatrist in all settings, and the psychiatrist sees a patient covered by that insurer in his or her private practice, the psychiatrist is an in-network provider and may be paid the in-network fees that were negotiated under the clinic contract. Even if the clinic’s contract with the insurer does not stipulate that all places of service are covered, a psychiatrist who wants to be considered out-of-network in another setting must notify the insurer in writing of that desire.

Products: Besides indicating which codes and places of service are covered, contracts also should indicate which specific products of the insurer are covered (that is, the HMO or PPO). Some contracts may state they are for “all products,” present and future, and those products may or may not have different fee schedules. When you sign one of these agreements, you accept all products and all future products without actually knowing the terms of the future products or the fee schedules for them. With the advent of health exchanges, this provision could pose a problem. If the insurer creates a new health exchange product, you may inadvertently become part of that network as well and will be required to accept the fee schedule. You should review your contracts to determine whether such a clause is present and how it impacts you.

Arbitration and ‘Choice of Law’: Other contract issues to watch out for are arbitration provisions and “choice of law.” Contracts often contain provisions requiring you to arbitrate a dispute. In effect, you give up your right to have a court determine the resolution. Contracts also have a “choice of law” provision; typically, the company decides to follow the law in the jurisdiction where it is located and requires that arbitration take place there rather than where you are located. You may not want to go to California to arbitrate a dispute if you practice in New York, so check that these provisions are not designed to make dispute resolution so inconvenient or expensive for you that you would be discouraged from using them.