Smell test’ can help you evaluate contracts
Here are some red flags to watch out for
Physician practices should apply the "smell test" to any potential contract, Todd Welter suggests. "If it looks like a rat and smells like a rat, it usually is a rat," says Welter, president of R.T. Welter and Associates and consultant to the Medical Group Management Association in Englewood, CO.
Here are some red flags to watch for when you evaluate your contracts:
- A contract with no rate page and no easily convertible methodology for payment. This makes it difficult for you to know if the contract is in your best financial interest.
- A plan with some kind of incentive or bonus for limiting care.
- A contract that contains a lot of rules about utilization.
- Clauses that instruct you to refer to the manual for details.
If the rules are not actually in the contract, the insurer can change them whenever they want and you could lose.
Before you sign the contract, ask yourself these questions:
Do you need it? Is it going to be profitable? Can you live with the terms? Does it provide you with competitive advantages? Can you deliver care for that price? Can you meet the obligations of the contract? Can you administer the contract? Can you handle the patient volumes that will be coming your way?Article Limit Reached
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