Most plan contracts forbid you to discriminate against a plan member for any reason. In other words, you must treat all plan members who seek treatment from you. This sounds fair on paper – but it could be a trap for the unsuspecting provider. By agreeing not to discriminate, you’re forced to treat patients you otherwise wouldn’t tolerate, such as patients who abuse your staff, sue for malpractice, any provider who treats them, refuse to pay copayments, or ignore their treatment orders. If you treat them, you could end up working in a frustrating, hostile environment and exposing yourself to unnecessary legal and financial risks.
While you can’t discriminate illegally against patients, you can build an exception into your contracts that will allow you to refuse to treat troublesome plan members, experts say. We’ll tell you what they recommend, and give you two alternative Model Contract Clauses to negotiate into your plan contracts.
What’s the Problem?
Most states have laws that require providers with plan contracts to treat plan members equally. The Health Care Financing Administration (HCFA) also requires providers in plans involving governmental programs, such as Medicaid and Medicare HMOs, not to discriminate on certain grounds, such as race, sex, or source of payment, according to plan attorney Stephen Camper.
To comply with the law, almost all plan contracts include a clause that says the provider may not discriminate in its treatment of plan members. Although the law prohibits discrimination only on the basis of race, sex, religion, age, and other specific categories, the contract language usually goes farther than the law requires, barring all discrimination. But this doesn’t mean providers are barred from rejecting a patient for practical, legitimate reasons.
As a result of the general prohibition, however, providers often end up contending with abusive patients (or their spouses), noncompliant patients, deadbeat patients, and litigious patients, according to Rochester attorney Edward Fox. “This comes up all the time,” he says. But since contracts don’t allow any discrimination, providers must either treat unbearable patients – or refuse to treat them and risk being sued by the plan or the member.
Clause Is Negotiable
Fortunately, you can avoid this dilemma, experts say. While the law bans illegal discrimination, there’s nothing illegal in refusing to treat patients for being unruly, disruptive, harassing, or otherwise troublesome. You can create an exception in the nondiscrimination provision in your plan contracts to differentiate between illegal discrimination and justifiable rejection of a patient. You have two options, say insiders.
Option #1: Get Right to Refuse Treatment
The best protection is to add a clause that specifically allows you to refuse to treat members if you have “reasonable cause.” Many plans are willing to add this language to their contracts, according to Illinois attorney Thomas P. Conley, who has successfully negotiated this provision into plan contracts on behalf of providers. “Plans understand and usually want to work with providers on this issue,” he explains. “It’s typically not in a plan’s form contract only because no one thought to include it.” Plan representatives agree. “This is an excellent clause to ask for,” according to Camper, who says, “It’s a reasonable limit.”
There’s a Model Contract Clause on p. 8 that you can use for this purpose. You would substitute the clause for the existing nondiscrimination clause in the plan’s contract, if the contract has nondiscrimination language. If it doesn’t, you would just add the clause to the contract. We recommend placing the clause in a separate section of the contract.
The Model Contract Clause has the following provisions:
Provider has right to reject patients. The clause gives you an absolute right to reject a plan member for “reasonable cause.” Reasonable cause isn’t open-ended. It’s defined as a member’s hostile or improper behavior, refusal to cooperate or follow your instructions, failure to pay the member’s portion of your bill, or making unreasonable or unnecessary demands on you or your staff. The clause allows you to reject the member up front or to terminate an existing patient/provider relationship [Clause, par. a].
Provider must try to notify plan and offer alternatives. You can’t just leave the plan and the member hanging. You must notify them in writing, “if possible,” and suggest other providers, “if warranted and available.” This last phrase means that you won’t violate the contract if you feel uncomfortable saddling a colleague with a patient whom you couldn’t tolerate [Clause, par. b].
Provider responsible for emergency or continuing care. Even if you reject a member in accordance with the clause, you agree not to abandon the member if the member needs emergency treatment or continuity of care while being transferred to a different provider. You don’t want to leave a patient – or the plan – in the lurch. This is consistent with a provider’s and plan’s legal obligations to plan members, says Conley [Clause, par. c].
Provider won’t discriminate illegally. You agree not to discriminate against members in violation of the law – for example, on the basis of race, sex, national origin, or disability. This preserves the plan’s original goal that providers not discriminate against members in violation of the law. Because the language may not follow the plan’s form contract language exactly, the plan may want to add that you also won’t discriminate based on the member’s affiliation with the plan or the amount of services he needs. That would be a reasonable request, says Conley [Clause, par. d].
Negotiator Says: Plans are more likely to agree to this clause if you point out that you can use it only if the plan member meets the definition of a troublesome patient in the clause; for instance, if he harasses your nurses. Also point out that the clause still has the nondiscrimination language the plans must keep in their contracts to comply with the law, so the plan isn’t giving up much by agreeing to add the clause. But Conley warns that if you’re negotiating an exclusive contract for your services, plans might not agree to add this clause because the rejected member would have nowhere else to go for treatment.
Option #2: Get Permission to Refuse to Give Treatment
Although having the right to reject a troublesome patient may be the best for providers, some plans may not want to give you the control to decide who or what is troublesome. But they may be willing to add a clause that lets you ask the plan for permission to refuse to treat a member. With this option, you may have to jump through more hoops to justify your request to drop a member as a patient, but a plan will likely want to accommodate it, according to New York attorney Jerrold Ehrlich.
You can add the following clause to the contract. It allows you to ask the plan to transfer a member to another provider for “good cause.” Good cause includes a member’s voluntary noncompliance with instructions, disruptive actions, and repeated nonpayment of copayments. The request must be in writing. The plan is required to review and respond to the request, which may not be unreasonably delayed or denied, within 30 days of receiving it. The 30-day time frame is negotiable.
Insert this clause following the plan’s existing nondiscrimination clause:
Model Contract Clause
Provider may request that a Member be transferred to another Provider for good cause. Good cause shall include but not be limited to: a Member’s failure to establish or maintain a satisfactory provider/patient relationship because of voluntary noncompliance with provider directives, Member’s disruptive nature, or Member’s repeated failure to pay copayments and coinsurance. Provider shall submit its request in writing. Plan shall review the request and notify Provider of Plan’s decision within thirty (30) calendar days after receipt of the request. No such request shall be unreasonably delayed or denied.
If Plan Balks at Adding Clause
If a plan won’t agree to add a clause to the contract giving you the ability to refuse to treat troublesome members, at least find out its policy on them. Most plans will work with providers on this issue, even if they won’t put it in the contract, says Ehrlich. Some plans will require the member to go through mediation. Others will support the provider and let the provider terminate its relationship with the member on a case-by-case basis, says Fox. A few plans will even threaten to kick the member out of the plan, he says. “If the member is particularly disruptive, or harasses several providers, the plan may not want him, either,” he points out.
Negotiator Sources
Stephen Camper, Esq.: Oxford Health Plan, 800 Connecticut Ave., Norwalk, CT 06856.
Thomas P. Conley, Esq.: Arnstein & Lehr, 120 S. Riverside Plz., Ste. 1200, Chicago, IL 60606.
Jerrold Ehrlich, Esq.: Epstein, Becker & Green, P.C., 250 Park Ave., New York, NY 10177.
Edward Fox, Esq.: Harris, Beach & Wilcox, 130 E. Main St., Rochester, NY 14604.
Reprinted with permission from the montly newsletter, Managed Care Contract Negotiator, January 1999. Copyright 2000 by Brownstone Publishers, Inc., 149 Fifth Ave., New York, NY 10010-6801. Call 1-800-643-8095 for a free sample issue.
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