Thursday, December 02, 2010
By Dan Schulte, J.D.
MDA Legal Counsel
From the December 2010 issue of the Journal
Question: I recently graduated from dental school and am opening my own practice. I have applied for participation with several dental plans. They have sent me their contracts. What are the things that I should be most concerned about as I review these contracts?
Answer: You should hire an attorney experienced in reviewing these types of contracts before you sign on the dotted line. You should also meet with your attorney to discuss the operation of your practice, your plans to attract patients, to grow, etc. The following terms will be contained in all these contracts and should be carefully considered by you prior to signing.
Fee schedule. One of the most important, if not the most important, term in the contract relates to the fees you will be allowed to charge. You would think that a fee schedule would be attached to the contract, itemized by procedure code so that you would know at the outset exactly how much you will be paid for your services. However, this is rarely the case. Typically, you will not know how much you will be paid for your services until you begin providing services and your claims are paid.
This is an absurd way of doing business. No one other than dentists, physicians and other health care providers would sell their services without first knowing the price. But it is the way almost all insurers and dental plans operate. You should insist that a fee schedule be attached to the contract or be made available to you by some other means. At a minimum, you should demand to know the fees for your most-common procedures.
If all fee information is withheld the termination provision (see below) becomes even more important. You do not want to be in a position where six months notice is required for termination, obligating you in the meantime to provide services at fees much lower than you expected.
It is also important to know how and when the fee schedule may be changed. Is advance written notice required? If the change is adverse and not to your liking, do you have the immediate right to terminate the agreement, or are you obligated to provide services at even lower fees for some notice period?
Which services are "covered"? The contract will obligate you to charge only the fee schedule amounts for "covered" services. Which services are covered could be much more broadly defined than you think. Are services covered only if provided to patients receiving a benefit from the insurer or plan? What if the insurer or plan does not provide a benefit (because there is no benefit for that procedure, an annual maximum has been met, etc)? Must you limit your fee even when the procedure is being paid for fully by the patient? What if the patient is enrolled in a plan that you have no contract with but the insurer or plan you have contracted with administers the patient’s plan? Does your contract with the administrator obligate you to limit your fees for all patients enrolled in plans it administers, even though you have no contractual relationship with the plan providing the patient’s benefit for the service you provided?
Term/termination. The term of the contract is not always obvious. Rarely does it last for a defined period (e.g., one year, two years, etc.). Instead, these agreements are "evergreen." This means they begin on the date signed and continue until someone terminates. You need to make sure you understand how you and the other parties may terminate the agreement. Is written notice required? If so, how much advance notice will you receive or need to provide in advance of the effective date of the termination?
You must also understand what obligations, if any, "survive" the termination of the agreement. For example, you may be obligated to continue providing services to patients for a specified period of time, or be required to provide access (for audit or other purposes) to your records for some period of time following a termination, etc.