Contract Language Key to Successful Insurer-Behavioral Health Provider Relationships

For behavioral health providers, working with commercial payers can be easier said than done.

Those relationships are often fraught with coverage disputes and low reimbursements, prompting many providers to opt to remain out of network for self-preservation. However, that often means higher costs for the patients who require their services. 

For behavioral health providers willing to take the plunge into the world of commercial insurance, developing a positive relationship often comes down to negotiating a mutually beneficial, carefully worded contract. 

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Polsinelli shareholder Jonathan Buck advised behavioral health providers how to do just that during a recent webinar covering behavioral health reimbursement trends and strategies, which was hosted by Polsinelli, a Kansas City, Missouri-based law firm with more than 875 attorneys in 21 offices nationwide. 

Buck shared common contract pitfalls and stipulations providers should be wary of, along with how to get around them.

Motivations matter

When Buck encounters behavioral health clients interested in pursuing contracts with managed care organizations and commercial insurers, the first question he asks is, “Why?” 

The inquiry isn’t meant to be cheeky, but rather to help inform the provider what they should be looking for and prioritizing in a contract. 

“Understanding why you want to be contracted really helps establish what types of terms you need to be looking for when you approach the commercial payers and start working through and negotiating the terms of an agreement,” Buck said.

For example, is a provider hoping to become in-network so that insured patients have the option to choose them for services? Is the goal to secure clearer reimbursement terms? Or is the intent to avoid the challenges association with operating out-of-network or on a private pay basis?  

If a provider’s motivations don’t clarify which terms are most important, past claims might, according to Buck. That’s especially true of claims denials, and even more so when such denials can be traced back to a common cause.

Some common examples include claims being denied because of covered benefit limitations, coding disputes, technical processes, authorization roadblocks or clinical issues, such as a disagreement over the definition of medical necessity.

“Those all play into how you need to approach your agreements with a plan,” Buck said, noting that providers should outline and clarify common pain points in contracts.

Looking beyond reimbursement

On top of that, it’s important that behavioral health providers look beyond reimbursement rates when negotiating contracts with commercial payers. If not, they run the risk of failing to see the forest through the trees.

“One thing I’ve always seen historically through negotiations with commercial insurers is that clients often prioritize and focus just on rate terms and don’t really pay much attention to contract language,” Buck said. “Those language terms that are in your agreements, while often appearing very boilerplate, are not just innocuous terms.”

Instead, Buck said those terms almost always have a significant impact on how claims are reimbursed — or how claims might be denied — down the road. As such, it’s important to customize terms and definitions to ensure smooth sailing once the contract takes effect.  

For example, insurers frequently add additional documents to agreements later on, which can substantially change a provider’s relationship with them. However, if providers anticipate such changes when negotiating contracts, they can better protect themselves.

“When these policy changes are material change to what your agreement is or has been, how can those things be neutralized or addressed moving forward?” Buck said.

To prepare for such instances, providers can fight to include contract terms that give them the ability to object to material contract changes.

Additionally, Buck recommends providers outline important definitions such as the ones for medical necessity and acceptable sites of care, in addition to clearly listing the codes insurers expect providers to use for various services.