Lakeshore Regional Entity
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1 Policy 4.2 POLICY TITLE: Contract Management POLICY #: 4.2 Adapted from SMA Topic Area: Applies to: Provider Network Management LRE and all member CMHSPs Page 1 of 5 ISSUED BY: Chief Executive Officer 11/21/13 REVIEW DATES Developed and Maintained by: LRE CEO APPROVED BY: Board of Directors Supersedes: N/A Effective Date: January 1, 2014 Revised Date: I. POLICY: The LRE shall develop and negotiate contracts, monitor compliance with all aspects of the contracts, conduct reviews for evidence of abuse and/or fraud, sanction providers as necessary, train providers concerning performance expectations and manage contracts for consumer services with out-of-network providers. II. PURPOSE: To assure that the provider network permits meaningful consumer choice and is in compliance with regulatory requirements and the performance expectations of the LRE. III. APPLICABILITY AND RESPONSIBILITY: This policy applies to the LRE and its member CMHSPs. IV. MONITORING AND REVIEW: LRE shall annually conduct a compliance review of each CMHSP, and shall assure that all aspects of this policy are consistently implemented. Based on this compliance review, LRE may request corrective action from member CMHSPs. LRE may request information regarding compliance with this policy at any time. LRE will provide rationale for the request, and will provide a reasonable timeline for provision of the information. V. RELATED POLICIES AND PROCEDURES: A. Network Development and Procurement B. Network Policy Development C. Credentialing, Privileging and Primary Source Verification
2 Page 2 of 5 VI. PROCEDURES A. Contract Development 1. Contracts shall be established with all providers delivering services to individuals on behalf of LRE. 2. Provider contracts shall a. Specify in measurable terms the obligations of the parties b. Identify the term of the contract c. Require individual practitioners and organization providers to be credentialed according to MDCH credentialing requirements d. Address timely access to services e. Address that providers are 24/7 when the services are the type that require 24 hour availability f. Address contract grievance and complaint mechanisms to resolve disputes B. Contract Compliance 1. Communication to Providers on Requirements & Expectations The LRE and each CMHSP within the LRE network will assist providers in understanding the contract requirements 2. Communication from Providers on Negative Action a. It is the responsibility of the provider to communicate negative actions b. Actions requiring notification include, but are not limited to: 1. Loss of accreditation. 2. Loss of insurance. 3. Unfavorable financial audit. 4. Successful litigation claim against the Provider member. 5. Loss of substance abuse license. 6. Loss or change in Adult Foster Care or Child Placing Licensing. 7. Reports of substantiated violations of State or Federal rules or regulations (i.e., Special Investigation Reports with substantial rule violations conducted by DHS Bureau of Children and Adult Licensing). 8. Any claim, allegation, financial loss or change in credentialing that can negatively impact the provider. 9. Sentinel Events (as defined by LRE policy [Incident, Event and Death Reporting. Must be reported as soon as possible and no later 24 hours after occurrence). 3. Provider Sanctions a. Unsatisfactory performance, lack of response, failure to submit plan of correction within required timeframe and/or discovery of significant risks (i.e., health hazard, injury, loss, exposure) may result in the application of a sanction. b. The focus of provider sanctions (compliance activities) will be on continuous improvement, as applicable.
3 Page 3 of 5 c. Providers will be sanctioned based on the severity and frequency of the contractual violation(s). C. Provider Monitoring 1. Individuals and organizations under contract with the LRE or a CMHSP for the provision of services: a. Are subject to the ongoing monitoring by the LRE and/or as delegated to one of the CMHSPs. b. Are required to implement improvement plans as indicated through identified deficiencies or areas needing improvement. 2. Quality Monitoring Reviews (QMR) are to: a. Include a representative sampling of persons served. b. Be conducted by individuals who have the expertise and qualifications for assessing the quality of the area being reviewed. c. Be conducted with no disruption to services. d. Provide accurate, timely and useful information. e. Include clear recommendations for improvement where needed. 3. Provider monitoring will result in summary performance reports 4. All instances of suspected fraud and/or abuse discovered during a provider monitoring review will be reported to the Corporate Compliance Officer 5. The LRE or applicable CMHSP will take firm and expedient action in the event of significant non-compliance D. Dispute Resolution 1. The provider dispute resolution process applies only to contractual disputes or compliance/performance disputes including: a. Suspension or termination of a provider with cause b. Credentialing or re-credentialing decisions c. A sanction or decision to place the provider on a provisional status d. Claims payment and authorizations e. Reduction, suspension or adjustments to provider payments f. Results reported through Quality Monitoring Reviews g. Other non-clinical issues 2. Notification of the Right for Dispute Resolution a. The right to Dispute Resolution will be included in each provider agreement. b. Providers will be informed of a progressive Dispute Resolution process as part of the notification of a negative resolution. 3. Filing a Dispute Resolution Request Each CMHSP will outline the procedures for its contract providers to submit a request for Dispute Resolution. The procedures will include the timeframes to submit the request, individuals responsible to respond to the requests and timeframes by which responses to Dispute Resolution requests must be made.
4 Page 4 of 5 E. Out of Network Providers Prior to establishing an agreement/contract, consideration must include the review of the following requirements or qualifications 1. Accreditation by JCAHO, CARF, COA, DNV or NCQA and/or the capacity and commitment to meet the Michigan Department of Community Health (MDCH) certification standards. 2. Compliance with all applicable professional and/or facility licensing and certification requirements. 3. Credentialing of staff. 4. Clinical and/or service expertise and commitment to serving the target population(s). 5. Administrative and management capacity related to standards and requirements. 6. Confirmation of the rate charged by the Out-of-Network provider to the host entity. 7. Agreement on the mechanisms for monitoring the quality of care. F. Subcontracting A CMHSP may subcontract with an organizational provider for the delivery of specialty behavioral healthcare services; but may not sub-delegate a managed care administrative function to an organizational provider, other than practitioner credentialing and customer services. 1. The Provider shall be responsible for each subcontracted vendor in the provision of services specified within the contract between the Provider and the LRE and/or CMHSP. 2. An individual contract provider may not subcontract LRE and/or CMHSP funded services to another vendor. 3. An individual contract provider may not outsource or subcontract the delivery of covered services to another organizational provider, but may contract with practitioner providers for the rendering of covered services. 4. The Provider shall be held solely and fully responsible to execute all provisions of the contract between the Provider and the contracting entity, whether or not the provisions of the contract are directly pursued by the Provider, affiliated Providers, or pursued by the Provider through a subcontract vendor. 5. The Provider shall ensure that subcontract arrangements clearly specify the type of services being purchased. 6. Subcontracts shall ensure that the LRE and/or CMHSP is not a party to the contract and therefore not a party to any employer/employee relationship with the subcontract vendor of the Provider G. Delegation The LRE shall have a written description of all delegated LRE functions. There shall be evidence that the delegation has been agreed to by both the LRE and the delegate, before the delegate entity begins performing the delegated activity. The written delegation agreement shall: 1. Be mutually agreed upon. 2. Describe the responsibilities of the LRE and the delegated entity in terms specific to
5 Page 5 of 5 their relationship as it pertains to each delegated function. 3. Describe the delegated activities. 4. Describe the process by which the LRE formally evaluates the delegated entity s performance, 5. Describe the remedies available to the LRE if the delegated entity does not fulfill the obligations, 6. If the delegation arrangement includes the use of protected health information (PHI) by the delegate, as defined by HIPAA regulations, the delegation agreement shall address the applicable HIPAA requirements. VI. DEFINITIONS: N/A
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