Nine Tips For Hospitals On Bayou Health Plan Agreements

When reviewing participating provider agreements with Bayou Health Plans, hospitals should keep the Louisiana Department of Health (“LDH”) requirements in mind as they carefully review proposed agreements for potential pitfalls.  The following are some tips for hospitals to consider.

  1. Who is included in the agreement? Although the question of who are the parties to an agreement seems simple enough, it can be trickier than expected.  Hospitals should carefully review information on the identity of the contracting entity.  Further, some agreements reference “Affiliates” and the ability of those Affiliates to access the provider agreement.  Sometimes the agreement includes an attachment listing affiliates.  Often times, the term is defined broadly to include a significant number of additional parties.


  1. What programs are covered? Another important initial consideration is whether the hospital intends the agreement to cover only services payable under the Louisiana Medicaid/Bayou Health Program.  If so, it is important to identify (and remove) language that would obligate the hospital to participate in other products such as health plans purchased on the exchange, Medicare Advantage plans, or other commercial products offered by the health plan.


  1. Provider Manual, Policies and Procedures. Virtually all provider agreements reference the applicability of a plan’s manual, policies, and procedures.  Hospitals should review these documents because they may be more restrictive than the requirements in the provider agreement.  For example, manuals often contain detailed information about dispute resolution processes that have a significant impact on the ability to challenge or enforce the agreement.


  1. Provider agreements, like most contracts, contain provisions regarding how the contract itself may be amended.  Often, there is a provision that states that the agreement cannot be amended absent the written agreement of the parties.  It is not uncommon to see language in provider agreements which allows a health plan to update its provider manual, policies, or procedures through an electronic notice or a newsletter.  These changes can have significant impacts on providers and hospitals should consider including language which would require prior notice and acceptance in writing by the provider of certain changes.  Further, hospitals should be wary of provisions that allow a health plan to amend the agreement upon written notice to the provider, where the provider does not object within thirty days, after receiving written notice of the proposed amendment.


  1. Handling Clean Claims. As a part of its agreement with health plans participating in the Bayou Health Program, the LDH requires that health plans pay 90% of all clean claims of each provider type within fifteen business days of the date of receipt.  Further, plans must pay 99% of all clean claims of each provider type within thirty calendar days of the date of receipt.  The date of receipt is the date that the health plan receives the claim (showed by its date stamp on the claim).  The date of payment is the date of the check or another form of payment.  Hospitals should be mindful of this baseline set by LDH.


  1. Can they do that? Louisiana Medicaid MCO provider agreements frequently allow for the imposition of financial penalties or sanctions by the health plan.  Can they do that? Yes, they can.  LDH allows for plans to impose monetary penalties, sanctions or reductions in payment by a health plan for a provider’s specific failure to comply with a contractual or credentialing requirement.  These include, without limitation, a provider’s failure or refusal to respond through the plan’s request for information, the request to provide medical records, or credentialing information.  However, hospitals should make sure agreements contain appropriate notice provisions and appeal rights so that they can challenge the proposed penalty, sanction, or reduction in payment.


  1. Timely Submission of Claims. The LDH allows providers to submit all clean claims for payment no later than twelve (12) months from the date of service.


  1. Offsetting/Recoupments. Some agreements give plans the right to immediately offset or recoup amounts allegedly owed to the plan.  R.S. 22:1832, of the Louisiana Insurance Code, requires that providers be given written notice, including certain information with an explanation of the reason for the recoupment request.


  1. Check out The Cheat Sheet! Don’t miss the LDH’s helpful requirement checklist, most recently updated on August 19, 2014.  It’s available at the following website and includes a five-page list of 61 different items:

Written By: Emily Black Grey

Grey, Emily headshot

Emily Black Grey a partner and the manager of Breazeale, Sachse & Wilson LLP’s Healthcare Section.  She practices in the firm’s Baton Rouge office.

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