The Importance of Contractual Language
Every Emergency Physician group that utilizes a billing and coding vendor should have a strong written contract. Yes, I know you went through the due diligence process of interviewing companies, checking their references, and maybe even speaking with previous clients (all of which I would recommend that you do prior to entering into any contract). However, I have recently witnessed several groups that are now stuck in long term contracts with billing companies that quite simply not performing up to the expectations of the physician group or delivering what was promised. The absence of certain key contractual language has created a real issue in many instances.
You ask “how does contractual language affect reimbursement?” For anyone who has been through the tough times with a billing company, you can readily provide the answer. Clearly, in most instances, the performance of your billing and coding vendor is the single largest variable with respect to reimbursement other than documentation and payor mix. I have witnessed instances of $20-30 differences in average patient collection with the same economic drivers present between billing companies; therefore, it is imperative that you know the terms of your contract and have appropriate mechanisms to get out timely if your company is not performing.
The Emergency Physician groups I referenced earlier all had long-term (three or more years) contracts that did not contain a “without cause” termination provision. It is my experience as a billing company owner, a sixty to ninety day “without cause” termination clause after the first anniversary should be standard as it protects both parties in the event of a souring relationship. The absence of this clause for the first year is necessary as transitions can be slow depending on several variables out of the billing company control such as provider numbers, chart flow, etc. Long term, I would much rather allow an unhappy client to exit without involving attorneys to decide if “cause” existed. However, I have seen some billing companies threaten to sue their clients even when they are not performing up to expectation rather than allow them to exit. This standard language can certainly protect emergency physicians and billing companies from very costly mistakes and long expensive legal battles.
Other hot button areas for your billing contract beyond the “without cause” termination period include venue for disputes, mode of handling disputes, billing fee structure, term (I would suggest 2-3 years), and a complete detailed listing of the services to be provided and what time frames they are to be provided in. The time frame for services is critical to make certain that the billing company codes and bills your charts timely, which generates your cash flow. Lastly, pay a good attorney with health care contracts experience to review your contract. This will be costly on the front-end; however, it may save you thousands later and avoid many potential headaches. Many good billing companies exist. Just make sure your contract with them contains protections for disputes that may eventually arise.