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Anesthesia Contract Terminology | Physician Employment Contract

There is a lot of legal jargon included in physician employment contracts that is also included in anesthesia contracts. To ensure effective negotiations, it’s important to have a basic understanding of some key terms and elements you should look for within your contracts.

Want to know all the details on how to negotiate a favorable anesthesia contract?

Physician Employment Contract Terms and Expectations

Terms are listed in alphabetical order.

  • Allowed amount: The maximum amount that a payor will reimburse for a specific covered service. Some other terms for this are “eligible expense,” “payment allowance,” or “negotiated rate.”
  • Clean claim: A claim that a payor can process without additional information. The contract should define exactly what is expected to avoid reimbursement delays and claim denials.
  • Dispute resolution: The process for mediation or arbitration of any disputed claims and steps for collecting the revenue owed. This can be outlined as an informal process or formal litigation.

Avoid language that binds any party to a specific dispute resolution process. Since it is typically the physician looking to dispute a denied claim, avoiding strict language provides room for leverage.

  • Fee schedule: The detailed breakdown of fees and payments for every service you provide. Each service is assigned a code and value unit that is adjusted for the geographical practice cost index and national conversion factor.

Push for a complete fee schedule that defines all possible covered services and the rate for each.

  • Medical necessity: Payors only reimburse for services that are deemed medically necessary, but each has their own definition of what that means. It can include clauses that limit the number of times a provider can perform a service in a defined period or limit the number of times a procedure can be performed in general.

Make sure you understand each payor’s specific definition since they can vary ever so slightly by contract. Billing for services that aren’t necessary can result in fraud investigations and punishment.

  • Network requirements: This outlines the networks where the anesthesia practice can provide services, including the credentialing requirements needed to join a specific network.

Avoid contractual language that allows the payor to select your network. Network changes should only be tied to credentialing requirements – not just an arbitrary selection of physicians.

  • Unilateral amendment: A provision that allows payors to change contract elements without notifying the provider. This can include anything from reimbursement rates to other terms of the contract.

Try to exclude this language in your contracts. If it must be included, make sure it includes a timeline for notification and agreement or objection of the amendment.

Still Need Help Understanding Your Physician Employment Contracts?

Navigating the complicated legal jargon used in physician employment contracts can make negotiations even more intimidating – but these negotiations are critical. Your physician employment contracts have the largest impact on your take-home salary. If you don’t regularly negotiate to at least market rates, you could be making 20-30% less than you should be.

To ensure productive and effective contract negotiations, we recommend finding a partner like Fusion Anesthesia. We can provide you with data that gives you a competitive edge at the negotiations table as well as additional practice management assistance to keep things running smoothly.

Interested in learning more about how we can help?

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Anesthesia Contracts: How to Negotiate the Best Deal for Your Group

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