AMA Model Managed Care Contract: Know what you're signing

No matter who you talk to, the advice on signing a contract is the same -- don't sign anything until you've read it and understood it.

Reading is one thing, but understanding is another. The meanings of a contract's words aren't always as black and white as the paper on which they appear.

To give physicians a frame of reference in checking out their contracts, the American Medical Association since 1997 has published and updated what it calls the AMA Model Managed Care Contract. Recently, the AMA released its fourth and latest edition of the contract. It's but one of many tools available at the AMA's Private Sector Advocacy Web site, open to all physicians seeking assistance in getting some leverage in the generally lopsided negotiations between themselves and health plans.

The 66-page AMA Model Managed Care Contract gives physicians pointers on what language to look out for, especially seemingly innocent verbiage that could come to haunt physicians later. The basics of the model contract haven't changed significantly since the first edition was released, but the latest version includes tips and tweaks that reflect new ways in which plans try to angle a greater advantage over physicians.

For example, the latest version has a supplement that discusses rental networks, also known as silent PPOs. As PPOs themselves have grown more popular, so has a greater market for leasing physician networks to so-called networkers and repricers.

Physicians might look at benefits statements from companies with which they never signed contracts, getting reimbursements far less than they do from the PPO with which they did sign. So the AMA, in its model contract, defines the term "payer" in a such a way that a managed care organization may not rent or sell its network to other entities, with the exception of a self-insured employer that has contracted with the plan to administer its benefits.

The latest edition of the model contract also strengthens its section on "coding for bills submitted" in light of plans' continuing misuse of CPT codes, guidelines and conventions through bundling, downcoding and reassignment of codes. Language also was added to require the plan to credential a physician within 45 days or grant provisional credentialing, in light of lengthy delays in credentialing.

Also, the contract includes provisions on one of the latest changes in health-plan contracting -- so-called pay-for-performance or quality improvement programs, which in theory are supposed to give physicians a bonus for better care. The provision in the model contract states that, unlike what has happened in some cases, such a program is evidence-based and has a mechanism for physician input. The language also states that participation in such a plan should be voluntary.

The AMA researched trends in contracts to come up with the new language, but it also got -- and continues to need -- input from physicians, as collected on the Health Plan Complaint Form on the Private Sector Advocacy Web site.

Physician vigilance is among the best ways to ensure that you know what you're signing. As the introduction to the AMA Model Managed Care Contract advises, physicians must review carefully what they're signing. They should insist on obtaining copies of health plan policies and procedures, and review them as part of the contract review. If the plan refers to materials at its Web site, physicians should get the address and password of the site and review them.

Physicians also should understand their practices' economic mix so they can realize the effect of each contract on its practice. It's OK to say no to a contract, especially one that doesn't make up a great deal of your patient base.

But when you decide that you will say yes to a contract, it pays to dig into the specifics in an informed way. This model contract shows how.