Medicare/Medicaid Contracts: When the Contract Can Benefit the Provider

Depending on the clauses, contracts can be your worst enemy or your savior.

Today I pose a very important question to you. Do your participation contracts that you sign with Medicare/Medicaid, managed care organizations (MCOs), and Medicare Administrative Contractors (MACs) – do they even matter? Are these boilerplate contracts worth the ink and the paper upon which they written?

The answer is yes and no.

To the extent that the contracts are aligned with applicable federal and state regulations, they are enforceable. To the extent that the contracts violate federal regulations, those clauses are unenforceable. The contracts can even, at times, be more stringent or contain more limitations than the federal regulations. One thing is for sure: these contracts can be your worst enemy or your savior, depending on the clauses.

An Idaho client provider of mine has been the victim of Optum “black hole-ism.” In this case, a contract provision will save my client from paying $500,000 it does not owe.

My client is the leading substance abuse mitigation provider in Idaho. Optum is managing Medicaid dollars, which makes it the agent of the “single state agency,” the Department of Health of Idaho, pursuant to 42 C.F.R. 431.10.

The Optum provider contract states that “it is agreed that the parties knowingly and voluntarily waive any right to a dispute if arbitration is not initiated within one year after the dispute date.” What a great clause. If only all contracts had this limiting clause.

In our dispute, as noted, Optum argues we owe $500,000. The first demand we received was dated December 2018, for dates of service (DOS) in 2016 and 2017. Notice that Optum was timely back in 2018. That was when the client hired my team, and we submitted a rebuttal and initiated the informal appeal to Optum.

Here was where Optum got sloppy. Months passed. A year passed. I hear crickets in the background. A year and a half passed. Who knows why Optum took a year and a half to respond? COVID happened. Was it bureaucracy and red tape? Apathy? Ineptness?

Finally, we get a response in September 2020. We respond in October 2020. Our new response included a novel argument that was not included in the 2018 rebuttal. Our argument went something like: “you’re too late, per section 7.1 of the Optum contract.” If we could have included a raspberry, we would done so.

Remember the clause? “It is agreed that the parties knowingly and voluntarily waive any right to a dispute if arbitration is not initiated within one year after the dispute date.”

Well, 2020 is 3-4 years after the initial DOS at issue: 2016-2017. This time, the boilerplate contract was our friend.

Since there is also an arbitration clause, which is not your friend, we will be wholly dependent on an arbitrator to interpret the one-year limiting clause in a logical, reasonable fashion. But I will be shocked if even an arbitrator doesn’t throw out this case with prejudice.

Programming Note: Listen to Knicole Emanuel’s RAC Report on Mondays on Monitor Mondays, 10 Eastern.

Print Friendly, PDF & Email
Facebook
Twitter
LinkedIn

Knicole C. Emanuel Esq.

For more than 20 years, Knicole has maintained a health care litigation practice, concentrating on Medicare and Medicaid litigation, health care regulatory compliance, administrative law and regulatory law. Knicole has tried over 2,000 administrative cases in over 30 states and has appeared before multiple states’ medical boards. She has successfully obtained federal injunctions in numerous states, which allowed health care providers to remain in business despite the state or federal laws allegations of health care fraud, abhorrent billings, and data mining. Across the country, Knicole frequently lectures on health care law, the impact of the Affordable Care Act and regulatory compliance for providers, including physicians, home health and hospice, dentists, chiropractors, hospitals and durable medical equipment providers. Knicole is partner at Nelson Mullins and a member of the RACmonitor editorial board and a popular panelist on Monitor Monday.

Related Stories

Understanding the Wright Approach

Understanding the Wright Approach

Concern about hospitals sharing space has caused angst for several years. But as reiterated by Centers for Medicare & Medicaid Services (CMS) official David Wright,

Read More

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Frank Cohen shows you how to leverage the Comprehensive Error Rate Testing Program (CERT) to create your own internal coding and billing risk assessment plan, including granular identification of risk areas and prioritizing audit tasks and functions resulting in decreased claim submission errors, reduced risk of audit-related damages, and a smoother, more efficient reimbursement process from Medicare.

April 9, 2024
2024 Observation Services Billing: How to Get It Right

2024 Observation Services Billing: How to Get It Right

Dr. Ronald Hirsch presents an essential “A to Z” review of Observation, including proper use for Medicare, Medicare Advantage, and commercial payers. He addresses the correct use of Observation in medical patients and surgical patients, and how to deal with the billing of unnecessary Observation services, professional fee billing, and more.

March 21, 2024
Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Explore the top-10 federal audit targets for 2024 in our webcast, “Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets,” featuring Certified Compliance Officer Michael G. Calahan, PA, MBA. Gain insights and best practices to proactively address risks, enhance compliance, and ensure financial well-being for your healthcare facility or practice. Join us for a comprehensive guide to successfully navigating the federal audit landscape.

February 22, 2024
Mastering Healthcare Refunds: Navigating Compliance with Confidence

Mastering Healthcare Refunds: Navigating Compliance with Confidence

Join healthcare attorney David Glaser, as he debunks refund myths, clarifies compliance essentials, and empowers healthcare professionals to safeguard facility finances. Uncover the secrets behind when to refund and why it matters. Don’t miss this crucial insight into strategic refund management.

February 29, 2024
2024 ICD-10-CM/PCS Coding Clinic Update Webcast Series

2024 ICD-10-CM/PCS Coding Clinic Update Webcast Series

HIM coding expert, Kay Piper, RHIA, CDIP, CCS, reviews the guidance and updates coders and CDIs on important information in each of the AHA’s 2024 ICD-10-CM/PCS Quarterly Coding Clinics in easy-to-access on-demand webcasts, available shortly after each official publication.

April 15, 2024

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

SPRING INTO SAVINGS! Get 21% OFF during our exclusive two-day sale starting 3/21/2024. Use SPRING24 at checkout to claim this offer. Click here to learn more →