Every payer contract your practice signs is a legal document that should not be taken lightly if you’re thinking of terminating it. But you should have a plan in place in case you’re ever in a position where a particular contract simply isn’t tenable for the long term.
Check these three considerations every practice should make before terminating a payer contract.
1. Check Contract Terms, Notice Period
Every payer contract you sign will include information about when the contract is good until, and whether any options exist for terminating the contract before that. The document will also outline whether you must provide a notice period prior to terminating, and if so, how long.
In some cases, you have the ability to terminate the payer contract one time each year, and if you miss the window, you should consult a qualified healthcare attorney who can advise you about whether you have any opportunity to get out of the contract or if you need to wait another year before you can do so.
2. Calculate How Much Money You’ll Lose
Before you pull the trigger on a payer contract termination, you must first calculate how much income that payer brings to your practice, how much you’ll lose if you end the contract, and how many patients will be affected.
Even if the payer has unfavorable terms, there may be cases where it would be more cost-effective to negotiate new terms than to terminate the contract. For instance, this may be the case if a large percentage of your patients are on that insurance plan. Severing the contract would likely cause you to lose all of those patients, and it’s always easier to retain existing patients than to find new ones.
3. Determine How It Might Affect Patients
If you’re thinking of terminating a payer contract, it’s imperative to keep the affected patients at top of mind. You’ll have very specific timelines when you must alert them by if you want to sidestep patient abandonment accusations.
In addition, you’ll need to develop a very strong communication strategy so that all patients are accurately informed in a timely manner. The last thing a practice needs is a patient coming in for their appointment, learning their insurance is no longer accepted, and missing out on needed care. This not only hurts the patient, but also makes the practice look bad and puts you at legal risk.
Speak to an attorney if you’re thinking of terminating a payer contract. They can help walk you through the details you may not be aware of to help you prevent legal issues.
| Your practice needs to grasp the complexities involved in dropping a payer if you’re thinking of letting one go. Let healthcare attorneys Daphne Kackloudis, JD, and Jordan Burdick, JD, walk you through the legal issues required during their online training, Terminate a Payer Contract Without Putting Your Practice at Risk. Register today! |
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