Physicians have recently reported receiving “provider network participation agreements” from an unregulated network PPO called California Healthcare Networks (CHN). The agreement, which is in many ways inconsistent with California’s unfair payment practices law, also claims that physicians who do not want to participate must opt out in writing and that inaction is considered acceptance of the contract terms. Physicians should be aware that insurers cannot deem participation in absence of a signed contract.

Among the contract terms that are inconsistent with California’s unfair payment practices law:

• No fee schedule disclosure: Regulated payors in California are required to fully and regularly disclose to contracting physicians their fee schedules and payment rules, including instructions for submitting claims and filing provider disputes.
• Requires that claims be submitted within 45 days: State law prohibits claim submission deadlines that are less than 90 days from the date of service for contracted physicians and 180 days for noncontracted physicians.
• Allows unilateral modification of contract terms without notice: State law requires regulated health plans to notify contracted physicians in writing 45 days before instituting any changes to fee schedules and payment rules.

Physicians are advised, before signing any new contract, to review it carefully. Among other things, physicians should ensure that the proposed compensation, including the payor’s payment policies and the rules it uses to adjudicate claims, will be sufficient to maintain the medical practice. Without doing this analysis, you cannot make an informed decision about signing the contract.

To help physicians negotiate and manage complex third-party payor agreements, CMA has published a contracting toolkit, Taking Charge: Steps to Evaluating Relationships and Preparing for Negotiations—A Focus on Payor Contracting. The toolkit is available free to members at the members-only website. Nonmembers can purchase the toolkit for $100 in the CMA Bookstore.

Contact: CMA’s reimbursement help line, 888/401-5911 or awetzel@cmanet.org.