Contracting question

Contracting question

Randy McFarland

7/28/2003

Hello List members-
I have been lazy during the past few years because of instead of sending
our customary fee schedule (when procuring contracts), I have quoted
some percentage related to Medicare profile, because that's what was
requested by the MCO.
  It is becoming apparent that directly tying my fees to Medicare rates
in a contract may be a mistake, because if (or when?) Medicare decides
to lower its rates, virtually ALL of my contracts would be immediately
impacted.
   Question: Wouldn't it be smarter of me to use our customary fee
schedule as the basis for negotiation? This way, since nothing in the
fee schedule or the contract referenced Medicare rates, the contract
wouldn't be subject to an arbitrary Medicare profile reduction. This
would effectively diversify my contracts so they are not globally
effected by a Medicare reduction.

Thanks,
Randy McFarland, CPO
Fullerton, CA