Analysis of Blue Shield of California Independent Physician & Provider Agreement (Fee for Service) - Updated

Transcription

1 Analysis of Blue Shield of California Independent Physician & Provider Agreement (Fee for Service) - Updated (This is an analysis of a document with the footer Independent Physician & Provider Model Agreement v9.0 rev doc beginning on page 2.) The following is an objective analysis of some of the major provisions of the above-referenced contract. As a reminder, the California Medical Association (CMA) cannot make recommendations as to whether a physician should sign a particular contract, or whether a specific contract is good or bad. However, CMA does recommend that physicians carefully review and understand the vast range of legal and practical implications associated with the execution of any contract for the delivery of medical services, as well as with the associated management and administrative implications. For additional information on evaluating and negotiating complex managed care contracts, see CMA s contracting toolkit, Taking Charge: Steps to Evaluating Relationships and Preparing for Negotiations A Focus on Payor Contracting. Contact: CMA Center for Economic Services 888/ or economicservices@cmanet.org. Issue Contractual Provision Comment Requirement to Comply With Non-discrimination Section Non-Discrimination. Provider provide services to Members in a manner similar to that in which Provider furnishes services to all other Provider patients, and with the same availability afforded to such patients. Provider shall not discriminate against Members on the basis of race, sex, color, religion, national origin, ancestry, age, marital status, physical or mental handicap, health status, disability, need for medical care, utilization of medical or mental health services or supplies, sexual preference or orientation, veteran s status, health insurance coverage, status as a Member, or other unlawful basis including without limitation, the filing by a Member of any complaint, grievance, or legal action against Provider. In providing services to Members, Provider shall comply with all applicable laws including, without limitation, the Americans with Disabilities Act. If (a) absent this Agreement, Provider would not be obligated to comply with any such laws, or (b) there is a new interpretation of or change to existing law that imposes new obligations on Provider, and (c) Provider reasonably determines that compliance with such laws would represent a material cost to Provider, Blue Shield agrees to meet with Provider in good faith to discuss the additional costs and possible additional compensation. If Blue Shield and Provider are unable to reach agreement regarding additional compensation, then Provider may terminate this Agreement upon sixty (60) days prior written notice to Blue Shield. This provision includes language required by the California Department of Insurance pursuant to health care access regulations that became effective in Blue Shield has assured CMA that the language is not intended to create any new onerous obligations for physician or to interfere with the scope and level of services a physician provides in his or her practice. Blue Shield has also assured CMA that this provision will be interpreted within the framework of applicable state and federal law. Further, Blue Shield has provided clarification to CMA that Blue Shield does not intend to abridge a provider s rights pursuant to the Health Care Provider s Bill of Rights, including the right to not accept additional patients if, in the reasonable judgment of the provider, accepting additional patients would endanger patients access to, or continuity of care (Health & Safety Code ; Insurance Code ) CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 1 of 12

2 Requirement to Comply With Utilization Management Procedures Requirement to Obtain Authorization for Referrals Section Authorized Services. Provider shall, except in the case of Emergency Services, provide Covered Services to Members as authorized in advance by Blue Shield or Blue Shield s delegate as may be required by and in accordance with the utilization management procedures established by Blue Shield and as described in the Provider Manual. In the event Provider concludes that care recommended or authorized through the utilization management program is medically inappropriate for the Member, Provider may access the expedited appeals process as described in the Provider Manual. Provider may also render that care which Provider, in the exercise of good medical judgment, believes is medically appropriate and may appeal any coverage denial by Blue Shield in accordance with the provisions set forth in Article VIII hereof. 2.4 Provider Referrals. Except as permitted by the Member s Evidence of Coverage, Provider shall not refer a Blue Shield Member to other health care providers without an advance authorization from Blue Shield or its delegate or otherwise in accordance with the utilization management procedures established by Blue Shield and as described in the Provider Manual. Without limiting the foregoing, if this Agreement applies to Blue Shield commercial HMO, EPO and/or Medicare Advantage Benefit Programs, Provider shall refer commercial HMO, EPO and/ or Medicare Advantage Members only to health care providers who/ that have entered into agreements with Blue Shield to provide Covered Services to Members for the provision of Covered Services. This provision shall not apply in the event a Member requires services for a medical emergency. Physicians are advised to obtain a copy of the referenced utilization management procedures as well as a copy of the Blue Shield Provider Manual and to review them carefully to ensure that the practice can comply with the requirements. Physicians should be aware that it is unlawful to require physicians to comply with quality improvement (QI) or utilization management (UM) programs or procedures unless the requirement is fully disclosed at least fifteen (15) business days before the contract is executed. (Health & Safety Code ; Insurance Code ) This provision requires that physicians, under certain Blue Shield benefit plans, obtain advance authorization from Blue Shield prior to referring a patient to another healthcare provider. Further, this provision requires physicians to refer HMO, EPO and/or Medicare Advantage enrollees only to participating Blue Shield providers. Physicians are advised to obtain a copy of Blue Shield s utilization management procedures and the Provider Manual and review them carefully to ensure that the practice can comply with the requirements. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 2 of 12

3 Requirement to Provide Ancillary Testing and/ or Procedures in Office and to Obtain Authorization for Ancillary Services Section 2.5 -Ancillary Tests and Procedures. Except as otherwise set forth in the Provider Manual, any ancillary testing and/or procedures (e.g., radiologic, laboratory, etc.) required in the treatment of Blue Shield Members shall be performed by Provider, unless (a) Provider does not have the facilities or capacity to perform a particular test or procedure, or (b) it is Medically Necessary to have the test or procedure performed by persons other than Provider. Provider shall, as set forth in the Provider Manual, obtain authorization from Blue Shield prior to performing such ancillary test or procedures. Physicians should be aware that to the extent your practice provides in-office lab, imaging, or other ancillary services, this provision requires that these services be available to Blue Shield enrollees. This provision further specifies that if a physician provides ancillary services on site, the physician can only refer to outside ancillary services if the physician does not have the facilities or capacity to perform a particular test or procedure, or it is Medically Necessary to have the test or procedure performed by persons other than the Provider. Under the terms of this provision, physicians are required to obtain authorization from Blue Shield prior to providing ancillary test or procedure. Physicians who provide in-office ancillary services may wish to obtain from Blue Shield a complete fee schedule for ancillary services and to review it carefully to ensure that the proposed reimbursement is sufficient to cover the cost of providing the service. Physicians should obtain a copy of Blue Shield s Provider Manual and review its requirements carefully to ensure that you have the administrative capacity to meet these requirements. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 3 of 12

4 Tiered Benefit Designs and Narrow Networks Section Tiered Benefit Designs and Narrow Networks. (a) Provider acknowledges and agrees that nothing in this Agreement shall limit or otherwise prohibit Blue Shield from: (i) at any time developing, marketing and implementing: (A) tiered products, plans, benefit designs or Benefit Programs; (B) provider networks which tier or rank participating providers (including Provider) and where such tier or rank directly affects the Member s and/or employer s premium, copayment or cost share or restricts or limits network access; and/or (C) narrow, restricted or limited provider networks or products that require Members (or those who pay for their coverage) to pay more for the same (or substantially similar) product or benefit design to access all Blue Shield contracted providers compared to a network that does not include Provider (collectively, Tiered/Narrow Products ); and (ii) except as expressly provided in Exhibit A hereto, including Provider in or excluding Provider from, or tiering or ranking Provider within, any such Tiered/Narrow Product. (b) Prior to excluding Provider from, or tiering or ranking Provider within, any Tiered/Narrow Product, Blue Shield shall provide written notice to Provider, reasonably prior to implementing or modifying the Tiered/ Narrow Product, that explains in detail how the Tiered/Narrow Product will work and Provider s status within the Tiered/Narrow Product. This provision authorizes Blue Shield to develop tiered benefits and narrow networks. Blue Shield has informed CMA that although they do not currently have employer groups that have purchased a tiered network, they plan to offer the tiered networks based on price point in anticipation of California s Health Benefits Exchange. The Exchange Board will select the plans eligible to be offered in the Exchange likely sometime in Under the provisions in 2.7, as well as Exhibit A and Exhibit B to this agreement, individual physicians may designate the level of fee schedule reduction you are willing to accept. Among other things, Exhibit A of this agreement allows a physician to designate the tier (pricing level) as well as other product types physicians are willing to participate in. As described in Exhibit B, Compensation Rates, physicians electing to participate in the Blue Shield Standard Network will be reimbursed at 100% of the current Blue Shield fee schedule. Physicians electing to participate in the Blue Shield Network A tier agree to be reimbursed at 90% of the Blue Shield fee schedule and physicians electing to participate in the Blue Shield Network B tier will be reimbursed at 80% of the Blue Shield fee schedule. Physicians electing to participate in the Blue Shield Network C tier will be reimbursed at 70% of the Blue Shield fee schedule. Additionally, as stated in question #5 of the FAQ included with the contracting notice, physicians electing to participate in the Medicare Advantage Direct Contract HMO product will only be reimbursed at 95% of Medicare rates. Physicians who wish to opt out of this product may do so in Exhibit A of the contract. See the discussion on Exhibit A towards the end of the document for more information on the ability to specify participation by product type. Physicians are advised to obtain a full and complete fee schedule from Blue Shield and to review the various pricing levels carefully before deciding at which tier, or pricing level, you would like to participate. Physicians may wish to use CMA s Financial Impact Worksheet to calculate the financial impact each of the pricing levels will have on your practice. It should be noted that subsection (b) specifies that Blue Shield reserves the right to exclude a physician from any tiered or narrow product, even if the physician has opted to participate in a specific tier. Blue Shield has provided clarification to CMA that physicians opting to participate in the Blue Shield Standard Network may have the opportunity to opt-in to the other tiers at a later date, if desired. Blue Shield has also clarified that enrollees in Blue Shield s PPO benefit plans will be able to continue to receive services from the provider of his/her choice; however, higher co-pays and/or deductibles may apply if the patient is enrolled in a narrow product. Additionally, Blue Shield does not honor assignment of benefits for any of their products for out-of-network services and pays the patient directly. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 4 of 12

5 Requirement to Receive Electronic EOBs and Electronic Remittance Advice via EFT Section 3.2-Payment of Claims. Blue Shield shall pay all valid and complete claims from Provider for Covered Services upon receipt, in accordance with the timeframes set forth in California law and in accordance with the Blue Shield claims adjudication rules and procedures as set forth in the Provider Manual. Provider shall use best efforts to accept payment for Covered Services and receive related explanations of benefits ( EOBs ) via electronic funds transfer ( EFT ) and electronic remittance advice ( ERA ), respectively. Blue Shield shall give Provider no fewer than sixty (60) days prior notice of any proposed changes in the Blue Shield Provider Allowances (as described in the Provider Manual) other than those affecting reimbursement for drugs and immunizations, which changes shall not be made more than once during each calendar year, and shall make reasonable efforts to ensure that such notices are appropriately and conspicuously labeled. Changes to the Blue Shield Provider Allowances affecting reimbursement for drugs and immunizations shall be made on the first day of each calendar quarter, as described in the Provider Manual and shall be posted on Blue Shield s website at Provider shall bill Blue Shield in accordance with the procedures as set forth in the Provider Manual and as described on Blue Shield s website at blueshieldca.com/provider/. All claims payments by Blue Shield will be accompanied by an EOB which describes the manner in which the claim was adjudicated and payment was issued. In the event a claim or any portion thereof is denied payment by Blue Shield, Provider will receive an appropriate communication from Blue Shield which describes the basis for the denial and contains all appropriate information as may be required by applicable state and federal law. Among other things, this provision requires physicians to use best efforts to accept electronic EOBs, electronic remittance advice (ERA), and electronic funds transfer (EFT). This provision further clarifies that Blue Shield will adjust or modify the contracted fee schedule no more than once a year upon 60 days prior notice, with the exception of pricing for drugs and immunizations, which are updated on the first day of each calendar quarter. Physicians are advised to obtain and review Blue Shield s fee schedule to ensure that the pricing for drugs and immunizations are sufficient to cover the cost to acquire these items. Further, since Blue Shield does not formally notice physicians when drug and immunization fee schedules are adjusted, practices should check Blue Shield s website on the first day of each calendar quarter for updated pricing. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 5 of 12

6 Requirement to Submit Claims Timely Medical Staff Privileges Required Section 3.3 -Timely Submission of Claims. Provider shall submit complete claims to Blue Shield for Covered Services furnished to Members no later than twelve (12) months from the date such Covered Services were furnished by Provider or, if Blue Shield is not the primary payor under the coordination of benefits rules described in Section 3.6 hereof, the date payment or denial is received by Provider from the primary payor. If Provider fails to submit a claim for Covered Services within the time-frames set forth in this Section, Blue Shield may deny payment for the claim. In such event, Provider waives its right to any remedies and to pursue the claim further, and may not initiate a demand for arbitration or other legal action against Blue Shield or pursue the Member for additional payment; provided, however, that Blue Shield shall, upon submission of a Provider Appeal by Provider, consider good cause for late submission of a claim denied as untimely. 4.1(d) requires that the physician be a member in good standing of the Medical Staff(s) of the health care facility(ies) identified on Exhibit A (if applicable). Physicians have up to twelve (12) months from the date of service to submit a claim to Blue Shield for payment. This provision is noteworthy in that many other health plans and insurers enforce a timely filing deadline of 90 days from the date of service. Although the 90 day time frame is consistent with California law, Blue Shield s longer timeframe to submit a claim is generally more favorable for physicians. Physicians have the opportunity, when completing Blue Shield s credentialing application, to indicate the type of hospital privileges (active, provisional, courtesy, attending). Blue Shield does not accept temporary privileges. Physician who do not maintain hospital privileges must meet one of the following three requirements: 1. Have in place a formalized referral process with at least one other physician who has a contract with Blue Shield of California. The other physician must be identified and provide Blue Shield with their written agreement to provide coverage. 2. Be a member of a medical group that has documentation defining the medical group inpatient coverage arrangements, i.e., hospitalists. 3. Explain how your practice is set up to care for patients who need immediate inpatient care, including policies for transfer and continuity of care. Requirement to Comply With Administrative Requirements Section Compliance with Administrative Requirements. Provider shall comply with the policies and administrative procedures of Blue Shield set forth in the Provider Manual, the terms of which are incorporated by reference herein, including, without limitation, those relating to the administration of Blue Shield s Medicare program(s), as applicable. Failure to comply such policies and administrative procedures shall be grounds for termination for cause following notice and failure to cure as set forth in Section 7.2 hereof. Physicians can contact Blue Shield s Credentialing Department for more information at (888) Physicians are advised to obtain a copy of Blue Shield s policies, administrative procedures, and Provider Manual and to review the documents carefully to ensure that your practice can comply with the requirements. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 6 of 12

7 Requirement to Comply With Quality Assurance Programs Written Notice of Termination Must Be Received Within 120 Days Prior to the Contract s Annual Renewal Date Requirement to Follow Timeframes For Appeal Section Quality Assurance Programs. Provider agrees to participate in any and all quality improvement and utilization management programs implemented by Blue Shield as more fully described in the Provider Manual. Moreover, Provider agrees to participate in Blue Shield s provider credentialing and recredentialing programs. If Provider concludes that care recommended or authorized through the utilization management program is medically inappropriate for the Member, Provider may access the expedited appeal process as described in the Provider Manual. Provider may also furnish that care which Provider, in the exercise of good medical judgment, believes is medically appropriate and may appeal any coverage denial by Blue Shield in accordance with the provisions of Article VIII hereof. Section Term. This Agreement shall be effective as of the date of execution by Blue Shield and shall remain in effect for one (1) year. Thereafter, this Agreement will automatically renew for successive one (1) year terms, unless and until terminated or modified in accordance with the terms set forth herein. Subject to Section 7.7 hereof, either party may terminate this Agreement without cause effective upon the annual renewal date by giving the other party written notice of non-renewal at least one hundred twenty (120) days prior to the annual renewal date. Termination shall have no effect upon the rights and obligations of the parties arising out of any transactions occurring prior to the effective date of such termination. Section 8.1(c) Provider Appeal Resolution Process. Blue Shield s Provider Appeal Resolution Process consists of two levels: (i) Initial Appeals Process. Provider Appeals initially must be submitted by Provider, in writing, within three hundred sixty-five (365) days of Blue Shield s determination, lack of action or alleged breach, to the address for Initial Provider Appeals provided on the provider portal of Blue Shield s website at (ii) Final Appeal Process. Any Provider Appeal that is not resolved to Provider s satisfaction during the Initial Appeal Process must be submitted to the Final Appeal Process. All Provider Appeals must be submitted to the Final Appeal Process by Provider, in writing, within ninety (90) days of Blue Shield s Initial Provider Appeal determination, to the address for such Provider Appeals provided on the provider portal of Blue Shield s website at This provision requires physicians to comply with Blue Shield s quality improvement and utilization management programs. Physicians are advised to obtain a copy of these programs and review them carefully to ensure that your practice can comply with the requirements. Physicians should be aware that either party can terminate this agreement only upon 120 days notice prior to the annual renewal date of the contract. This provision is bilateral in that both the physician and Blue Shield must follow the specified timeframes in the event of contract termination. Note that previous versions of the Blue Shield Provider Agreement permitted either party to terminate the contract without cause by providing 90 days prior notice. Physicians should note that while they have 365 days from the date of last action by Blue Shield to file an initial appeal, second level appeals must be submitted within 90 days of the initial appeal response. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 7 of 12

8 Contract Amendments/ Notification Requirements Section Termination by Provider Upon Certain Events. If Provider objects to any changes in the Provider Manual and/or to the Blue Shield Provider Allowances (as described in the Provider Manual), about which Provider receives notice pursuant to Sections 1.10 and/or 3.2 hereof, Provider may, within forty-five (45) business days of receipt of such notice, terminate this Agreement upon sixty (60) days prior written notice to Blue Shield, in which case the proposed changes shall not apply during the termination notice period. Section Amendments. Except as provided in Section 1.10, Section 3.2, Section 4.4(a), and this Section 9.5, this Agreement may be amended only by mutual, written consent of Blue Shield and Provider. Notwithstanding the foregoing, or if Blue Shield s legal counsel determines in good faith that this Agreement must be modified to be in compliance with applicable federal or state law or to meet the requirements of accreditation organizations which accredit Blue Shield and its providers, Blue Shield may amend this Agreement by delivering to Provider a written amendment to this Agreement incorporating the required modifications (the Legally Required Amendment ), along with an explanation of why such Legally Required Amendment is necessary. If Provider does not object to the Legally Required Amendment, in writing, within sixty (60) days following receipt thereof, such Legally Required Amendment shall be deemed accepted by Provider and an amendment to this Agreement. If Provider timely objects to the Legally-Required Amendment, then Provider and Blue Shield shall confer in good faith regarding Provider s objection(s). If Provider and Blue Shield are unable to resolve Provider s objection(s) to the parties mutual satisfaction within thirty (30) days of Provider s notice, then, within sixty (60) days of Provider s notice, Provider may elect to terminate this Agreement upon ninety (90) days prior written notice to Blue Shield, and the Legally Required Amendment to which Provider objected shall not be effective as to Provider during the termination notice period. Unless Provider so terminates this Agreement, such Legally Required Amendment shall be deemed accepted by Provider and an amendment to this Agreement. California law requires health plans and insurers to provide at least forty-five (45) business days prior notice of a material change to a contract. The law further gives physicians the right to the terminate the contract prior to the change becoming effective. (Health & Safety Code ; Insurance Code ) 7.4 is applicable to material modifications to the contract and specifies that Blue Shield will provide the physician with 45 days notice of a material change to the contract. If the physician does not agree with the proposed change, the physician may terminate the contract by providing 60 days prior written notice to Blue Shield. The termination notice must be received by Blue Shield within 45 days of receipt of the notice. It should be noted that If a physician terminates the contract according to the terms of this section, the proposed material change will not apply to that physician during the termination notice period. 9.5 applies to Legally Required Amendments, and specifies that Blue Shield will provide the physician with 60 days notice of an amendment that is legally required to be compliant with federal or state law. If the physician does not agree with the proposed change, the physician must notify Blue Shield of his/her objections within 60 days of receipt of the notice. If Blue Shield and the physician are unable to resolve the physician s objections with 30 days of the physician s notice to Blue Shield, the Physician may terminate the contract by providing 90 days prior written notice to Blue Shield. The termination notice must be received by Blue Shield within 60 days of the physician s notice to Blue Shield that the amendment is not acceptable. It should be noted that If a physician terminates the contract according to the terms of this section, the legally required amendment will not apply as to that physician during the termination notice period. CMA has notified Blue Shield of our concern that as written, this provision makes it difficult for physicians to understand their rights and responsibilities under the contract, specifically the timeframes associated with responding to a notice of a legally required amendment. It should be noted, however, that California law does not require a health plan to provide prior notice of a change to a contract if the amendment is necessary to comply with state or federal law, regulations or accreditation requirements. (Health & Safety Code ). The fact that Blue Shield does notify physicians and provides the physician with the opportunity to negotiate a legally required amendment is noteworthy. CMA will continue to work with Blue Shield to streamline the timelines associated with this provision so that physicians can more clearly understand their rights and responsibilities with regards to legally required notices. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 8 of 12

9 Obligation to Provide Up-To-Date and Accurate Provider Directories Section Directory and Use of Names. Blue Shield shall develop a directory of healthcare providers participating in Blue Shield which shall be distributed to Members. Provider agrees that the following information may be included in Blue Shield s marketing materials, Blue Shield publications provided to current or potential Members and subscriber groups, and in other written or electronic information sources: (a) Provider s name, address, phone number; and, (b) such other types of information regarding Providers which are reasonable to include in directories, marketing materials, or publications. Provider agrees that in the event this Agreement is terminated, or the listing information is or becomes incorrect or incomplete, Blue Shield will have no obligation to correct, delete, or update such listing information until such time as Blue Shield, in its sole discretion, and in compliance with the Knox-Keene Act, issues a new directory, marketing materials, or Blue Shield publication. Provider may identify himself/herself/itself as a participating/ contracting provider with Blue Shield in all Benefit Programs and Tiered/Narrow Products in which he/she/it participates. Prior versions of this agreement stated...blue Shield will have no obligation to correct, delete, or update such listing information until such time as Blue Shield, in its sole discretion, issues a new directory, marketing materials, or Blue Shield publications. This provision was particularly problematic given the requirement in 2.4 of this agreement that physicians must refer only to Blue Shield participating providers. Additionally, it did not appear to comply with CA law, which requires plans to ensure provider directory information is updated at least quarterly (Health & Safety Code (c)). Blue Shield acknowledged CMA s concerns, assured CMA that it is their policy is to update the online participating provider directory on a weekly basis, and has since modified the agreement to state, Blue Shield will have no obligation to correct, delete, or update such listing information until such time as Blue Shield, in its sole discretion and in compliance with the Knox-Keene Act, issues a new directory, marketing materials, or Blue Shield publication. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 9 of 12

10 Other Payors Section Other Payors. Blue Shield may contract with employers, insurance companies, associations, health and welfare trusts or other organizations to provide administrative services for plans provided by those entities which are not underwritten by Blue Shield. In addition, Blue Shield may extend this Agreement to managed care arrangements established by Blue Shield subsidiaries, or by persons or entities utilizing the Managed Care Network which Blue Shield has established pursuant to agreements with CareTrust Networks and Blue Shield of California Life & Health Insurance Company. All such entities shall be referred to as Other Payors. Blue Shield shall require that: (a) the health programs of Other Payors include provisions to encourage the use of Blue Shield contracting providers, and (b) Other Payors comply with performance standards relating to timely processing of claims which meet or exceed the time requirements set forth in California law. Provider agrees that, if Blue Shield is not the underwriter of the health plan for the Other Payor, Provider shall look solely to Other Payor for payment for services. The identity of Other Payors shall be disclosed in the Provider Manual. If, despite reasonable efforts, Provider is unable to obtain appropriate payment from an Other Payor, Provider may notify Blue Shield and Blue Shield shall undertake reasonable efforts to assist Provider in obtaining proper payment. If, within fifteen (15) days following notification to Blue Shield, Provider still has not obtained payment from the Other Payor, then Provider may immediately terminate this Agreement. This Section authorizes Blue Shield to lease their network, including the physician s negotiated discount, to other payors, including Blue Shield of California Life & Health Insurance Company. Other payors may include, but are not limited to, self-funded/erisa plans, third-party administrators, workers compensation carriers and other health plans. California law requires plans that sell or otherwise convey their lists of contracted health care providers and reimbursement rates to a payor or another contracting agent must meet specified requirements each time they enter or renew a provider contract. These requirements include all of the following: - Disclosure of whether the list may be sold or otherwise conveyed, and specification of whether workers compensation insurers or automobile insurers may be the recipients; - Disclosure of whether future payors may be permitted to pay a physician s contracted rate without actively encouraging enrollers to use contracted providers; - Upon the signing of a contract, and within 30 calendar days of receipt of a written request from a physician, disclosure of a summary of all payors (including name and plan type) currently eligible to claim a physician s contracted rate; and - The opportunity to decline to be included on any list conveyed to payors that do not actively encourage their beneficiaries to use the list. This opportunity must be provided not only upon initial signing and renewal of the contract, but also upon each amendment. Providers who so decline may not, for that reason, be excluded from any list with respect to payors that do actively encourage list use. (Health & Safety Code (b).) In addition, California law requires that health plans that sell, lease or transfer contracted discounts may not transfer just the discount - rather, the other payor must abide by all of the terms of the underlying contract. (Health & Safety Code ). Physicians are advised to obtain and review Blue Shield s list of other payors and to make the list readily available to office staff so that the practice is aware of the plans that have legitimate access to the negotiated discount. For more information on rental networks and network leasing, see CMA medical-legal document #1907, Silent PPO Action Plan. CMA has worked collaboratively with Blue Shield since 2000 to ensure that Blue Shield s Independent Physician & Provider Agreement includes a provision that enables physicians to seek the assistance of Blue Shield in the event an other payor fails to reimburse a claim or claims. Specifically, this provision authorizes physicians to contact Blue Shield for assistance in securing payment from the other payor. If Blue Shield is unsuccessful in facilitating payment to the physician within 15 days, the physician may immediately terminate their Blue Shield contract. CMA has expressed concern that a physician s only option, absent payment from an other payor is to terminate the entire Blue Shield contract. CMA has requested that Blue Shield consider modifying this provision to enable physicians to terminate as that specific payor. Blue Shield has informed CMA that they unwilling to modify this provision as written. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 10 of 12

11 All Products and Ability to Specify Participation by Product Type See Exhibit A, PROVIDER INFORMATION. Exhibit A provides the physician with the opportunity to designate the opt-in or opt-out of Blue Shield s various product offerings. Specifically, physicians can either opt to participate with Blue Shield on an all products basis, or the physician can affirmatively opt- out of specific products. Physicians are advised to carefully review the participation options and to check the box next to the products with which you DO NOT wish to participate. Based on questions CMA has received, Blue Shield has clarified for CMA that: Physicians have the opportunity to opt out of the tiered networks (A, B & C), among others, at the time of recontracting. However, should the physician decide after the contract is executed that he/she wishes to opt out of the tiered networks he/she may only do so at the time of contract renewal (one year from the date the contract was executed), pursuant to 7.1. If a physician wishes to ONLY participate in the standard commercial PPO/EPO (Blue Shield Standard Network) and no other product types or tiered networks, the correct way to indicate this decision is to affirmatively opt out of the other seven product types listed in box 2 on Exhibit A. As stated in #2 in Exhibit A, the agreement is specific to the Blue Shield commercial PPO/EPO (Standard Network), so by signing you are already agreeing to participate in that product. CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 11 of 12

12 Fee Schedule Disclosure See Exhibit B, COMPENSATION RATES. Physicians are advised to obtain specific fee schedule information associated with each and every service to be provided under the contract. Specifically, physicians should obtain and review the rates set forth in the Blue Shield Provider Allowances, as described in the Provider Manual. Physicians can obtain fee schedule information by logging on to Blue Shield s Provider Connection. California law requires health plans to disclose all fee schedules, payment policies and payment methodologies to contracting physicians. The disclosure must include the amount of payment for each and every service to be provided under the contract, including any fee schedules or other factors or units used in determining the fees. To the extent that reimbursement is made pursuant to a specified fee schedule, the contract must incorporate that fee schedule by reference, including the year of the schedule. For any proprietary fee schedule, the contract must include sufficient detail that payment amounts related to that fee schedule can be accurately predicted. (28 C.C.R (o)). Detailed payment policies and rules and non-standard coding methodologies used to adjudicate claims must be disclosed and shall: 1) when available, be consistent with Current Procedural Terminology (CPT), and standards accepted by nationally recognized medical societies and organizations, federal regulatory bodies and major credentialing organizations; 2) clearly and accurately state what is covered by any global payment provisions for both professional and institutional services, any global payment provisions for all services necessary as part of a course of treatment in an institutional setting, and any other global arrangements such as per diem hospital payments, and 3) at a minimum, clearly and accurately state the policies regarding the following: - consolidation of multiple services or charges, and payment adjustments due to coding changes; - reimbursement for multiple procedures; - reimbursement for assistant surgeons; - reimbursement for the administration of immunizations and injectable medications; - recognition of CPT modifiers. This contract analysis is provided by CMA s Center for Economic Services. Contact: Reimbursement Helpline (888) or economicservices@cmanet.org CMA Analysis of Blue Shield of California Independent Physician & Provider Agreement Rev Page 12 of 12