Managed Care Contracts
Managed care is a health care delivery system organized to manage cost, utilization, and quality. Every healthcare provider must settle on a managed care contract between itself and the payer.
According to Findlaw.com, the contract between a clinical laboratory or other health care professional and a managed care organization (MCO) such as a provider-sponsored network, integrated delivery system, health maintenance organization, or other health care plan, is the fundamental document which frames, defines and governs their relationship. Contractual provisions can affect payment, office organization, practices and procedures, and confidential records as well as clinical decision-making.
Findlaw states, “A good managed care contract, like any other form of business agreement, is clear, consistent, comprehensive, and concise. It will conform to both the intent of the parties, setting out their respective rights and responsibilities, and the requirements of state and federal law.”
For example, Medicaid managed care provides for the delivery of Medicaid health benefits and additional services through contracted arrangements between state Medicaid agencies and managed care organizations (MCOs) that accept a set per member per month (capitation) payment for these services.
Depending on the market share of the health plan and the services offered by the healthcare provider, the negotiability of the contract will vary. Well-established managed care plans that have a large market share typical use form contracts. Newer managed care plans that have little market share and want broad provider participation are generally more willing to negotiate terms.
The Patient Protection and Affordable Care Act and the move toward accountable care has put a much greater emphasis on quality measures than in previous years.
Healthcare providers must prove in contract negotiations how well they manage quality and cost; such proof is usually provided with a comprehensive set of quality measures reported directly from the electronic health record (EHR). This can be straightforward for a single practice using the basic reporting functionality of its EHR, a more complex managed care plan might require features that an EHR vendor doesn’t offer.
Payers Asking for Repayment When Labs Waive Fees
CEO SUMMARY: Health insurers appear to have stepped up their efforts to warn clinical laboratories not to waive patients’ fees in return for specimen referrals. Consultants also say that payers are increasing enforcement efforts. There are cases where, when insurers discover labs have n…
LabCorp, Quest Diagnostics Both Say 2014 Revenue Was Up
BOTH OF THE NATION’S LARGEST clinical laboratory companies reported increased specimen volume as a result of the Accountable Care Act (ACA), as noted in their respective fourth quarter and full-year earnings reports. First to issue its earning statement was Quest Diagnostics Incorporated. On…
In this Philadelphia Story, LabCorp Uses 2007 Script
CEO SUMMARY: There’s a managed care contracting play-book that seems to be working better for Laboratory Corporation of America than it does for Quest Diagnostics Inc. On July 1, LabCorp became the exclusive national lab provider for Independence Blue Cross of Philadelphia. For the past…
Aetna Threatens to Expel Docs for Out-of-Network Lab Referrals
MANAGED CARE PLANS are taking aggressive steps to keep clinical lab testing within their preferred networks. In particular, Aetna, Inc., is earning a reputation as one of the toughest insurers in this regard. Most recently, in a letter sent to at least one network physician, Aetna w…
Aetna To Lower Lab Test Prices, New Fees Are Effective on July 1
IN RECENT MONTHS, labs are reporting the receipt of letters from Aetna, Inc., announcing that it will pay dramatically less than Medicare prices for many key lab tests. Aetna said that these lower prices will take effect on July 1, 2013. Three examples illustrate the deep fee cuts t…
Lab Copays Announced by California Exchange
CEO SUMMARY: California will operate one of the nation’s largest health insurance benefit exchanges, as defined by the Affordable Care Act. Officials recently unveiled details about the exchange, to be called Covered California. Based on bronze, silver, gold, or platinum plan coverage, …
Preserving Competition Is Goal of California Lawsuit
CEO SUMMARY: Once again, the use of deeply-discounted lab test pricing to win exclusive managed care contracts is involved in a court case. However, this latest private lawsuit is different from earlier cases because it seeks to preserve competition in the lab testing and the managed care…
LabCorp’s BeaconLBS Aims To Manage Genetic Tests
CEO SUMMARY: BeaconLBS is a new business created by Laboratory Corporation of America. It says it wants to help health insurance plans manage molecular diagnostics and genetic testing. BeaconLBS is now recruiting other clinical labs to join its network and is meeting with payers to offer …
Aetna Sues LabCorp Over Lab Marketing Practices
CEO SUMMARY: Aetna, Inc., sued Laboratory Corporation of America in federal court, seeking injuctive relief for actions taken once LabCorp became an out-of-network laboratory provider for Aetna in July 2007. LabCorp is also accused of a “malicious scheme to continue to receive …
Local Labs Have Opportunities To Increase MC Patient Access
CEO SUMMARY: Although the nation’s two largest laboratory companies have achieved a dominant managed care position, opportunities remain for regional labs to do more business with managed care plans. Two experts provide an update of managed care pricing trends for labo…
CURRENT ISSUE
Volume XXXII, No. 6 – April 21, 2025
Now that a federal judge has vacated the FDA’s LDT rule, The Dark Report analyzes the judgement and notes the various steps the FDA could take in response. Also, lab testing at pharmacies is proving to be less successful than was once anticipated.
See the full table of contentsHow Much Laboratory Business Intelligence Have You Missed?
Lab leaders rely on THE DARK REPORT for actionable intelligence on important developments in the business of laboratory testing. Maximize the money you make-and the money you keep! Best of all, it is released every three weeks!
Sign up for TDR Insider
Join the Dark Intelligence Group FREE and get TDR Insider FREE!
Never miss a single update on the issues that matter to you and your business.