Managed Care Facility Contracts

Managed Care Facility Contracts

As previously stated, in order to contract with other third party payers, Certification by Medicare as a provider of surgical services is mandatory.  Many payers also require accreditation before the facility can obtain a contract with them.  This process, however, should be started as soon as the proposed facility has filed a notice on intent as applicable in the State or the CMS applications have been filed. The credentialing process should be started by requesting facility applications and then completed when the facility is found to be in compliance.

The contract proposal from the MCO should include a fee schedule for each CPT code that the ASC will be providing.  Most Managed Care contracts typically do not send their entire fee schedule that represents all of their approved fees.  For procedures that are not listed on their fee schedule, it is important to ascertain how non-covered services will be paid, such as fee for service and at what percentage of billed charges.

Negotiations on the facility contract should include exclusions.  Determine their policies on what is included in the facility fee rate.  Many MCO’s will reimburse for the technical component of fluoroscopy and drugs/supplies in addition to the flat rate.

You may find that these fee schedules are tied to the Medicare payment groups at a percentage of the national average allowance.  Generally the contract fees are subject to change based on the contract with the payer.  It is critical at contract negotiation time to identify the current fee schedule and how often the payer can change these fees and what notification timeframe is required when a change is made. The contract should have an escalator clause to account for time and inflation.