Contract clauses you like

Contract clauses you like

Randall McFarland, CPO

Hello List members,
   Why don't we share some pointers to consider when negotiating proposed
contracts?
What have you learned the hard way with past contracts where better verbiage
in a contract might have saved you some trouble/expense?
    As you know, most contracts are primarily designed to protect the managed
care organization (MCO) more than us, the vendor. Remember that you do not
have to accept a contract as presented. You can negotiateand change wording
by crossing out an item, writing in your change and initialing it. You can
only do this before the contract is signed, of course. I have done this
(without even asking) decreasing the proposed discount by a third.
(Sometimes, if you ask, they'll just tell you no.)
   Not an unheard of occurrence these days is a MCO going down. It's happened
to us twice in the past 3 years and it's frequently difficult to know when to
terminate services with a late-paying company vs. when to hang in there in
support of them in hopes they'll improve and continue sending you work. (In
our most recent case, just when we decided to quit continuing services, they
went under anyway.) Our fear was that if we gave written notice that we were
going to stop services, they might quit referring to us. A good provision is
to assure that time be allowed for the breach to be cured, so that a written
notice need not be considered a threat, but rather, a reminder.
   Remember that any general contractor knows that ..if you get every job
you bid on, you're bidding too low. You have to be willing to walk away
from some contracts to get your best reimbursement rates. If you're too
afraid to get the MCOs upset, you'll be running yourself into the ground for
inadequate compensation, which is no sweat of their back, but will be doing
your clients a disservice. Remember that if we come across as whimps that
they can manipulated without repercussion, that's exactly what we'll become
to the MCOs.
    I like to include a clause to encourage the hospital or MCO to stay
current on it's payments to us. It eliminates all discounts if the contracted
payment turnaround time is exceeded. Timely, reliable payment should be
considered a trade for the discount and we should make that clear in all
negotiations.
    Another idea is to charge extra for after-hours calls to encourage the
hospital to call when we're open. Most emergencies are really to expedite
discharge to save the hospital money.
    Carve out's (modifications) can be made to a fee schedule for
particular procedures you feel justify higher payment.
    Let's hear some other ideas you list members have learned to include or
would like when negotiating contracts.... Remember, I cannot repost specific
fees or discount percentages. Please be concise and also let me know if you
don't want your name included.

Thanks for your contributions and Happy New Year!

Randy McFarland, CPO
www.sunnyhills.com
Fullerton, CA