Some advice before you sign: AMA Model Managed Care Contract

Before you sign on the dotted line with a health plan, check out the AMA's updated model contract.

Posted March 1, 2004.

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For the many thousands of physicians now involved in contracts with managed care organizations, the problem needs little explanation. Put a group of physicians together in almost any environment and the conversation inevitably turns to a sharing of frustrations, angers and resentments carried by some practitioners toward managed care.

Recognizing the needs -- and problems -- of these physicians, the American Medical Association has just published an updated version of the AMA Model Managed Care Contract to reflect legal and other developments since the first edition was published several years ago. New portions of the model contract -- now in its third edition -- address developments in the law regarding medical necessity, HIPAA regulations and prompt payment -- three of the biggest issues that cause headaches for physicians.

Also a part of the new AMA package, developed by the Association's Private Sector Advocacy unit, is "15 Questions to Ask Before Signing a Managed Care Contract." The two-page pamphlet, written in clear, straightforward prose, provides a valuable, comprehensive checklist for any physician contemplating entering into a new agreement. A sample:

Q: How do you determine whether medically necessary services are covered by a patient's benefit plan?

  • Does the MCO have a quick and efficient mechanism to determine whether medically necessary services you intend to provide a patient are covered under the patient's benefit plan (e.g., phone line or Web site)?
  • Is this clearly spelled out in the contract or a policy manual that you have received?
  • Does the MCO stand by this information or does it reserve the right to reverse itself?

The primary goal of the PSA's material, of course, is to guide the physician and his or her attorney when thinking about signing a contract. Such a solid beginning lays the groundwork for success throughout the duration of the contract and the potential for diminishing some of the hassle factor that accompanies many physicians' relationships with managed care.

A recent survey of physicians led to the conclusion that an average primary care physician was spending about 40 minutes every day on hassles with managed care, with most of the problems involving referral and prescription issues. This is no small matter. That same survey used an estimate of 137,000 physicians with managed care contracts and extrapolated the data to conclude that 21.9 million hours of patient care are lost to managed care hassles every year -- enough time for about 65 million patient visits.

Not many years ago, a common complaint among attorneys was the call from a physician who would say, "I just signed a new contract and I want you to look at it for me." Fortunately for all parties, lessons learned by experience and example appear to be prompting fewer such calls. The fact remains, however, that the wording of many managed care contracts can be intimidating to anyone not involved in such matters on an almost-daily basis.

The AMA's publications are not designed to take the place of competent, individualized legal advice from a qualified professional. But taken together, the AMA Model Managed Care Contract and the accompanying "15 Questions to Ask" provide a valuable resource for protecting the physician as well as minimizing the day-to-day frustrations that are a part of so many practices.

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External links

The AMA's Model Managed Care Contract and "15 Questions to Ask before Signing a Managed Care Contract" (link)

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