For Psychiatrists: How to Negotiate a Managed Care Contract

Though it’s often overlooked, an essential skill for in-network psychiatrists is learning how to negotiate a managed care contract. That’s because for many psychiatrists, it takes a claims denial before they set aside time to look into their rights—and realize they have very limited recourse.

If this describes you, don’t despair. In a guest column for the American Psychiatric Association’s Psychiatric News, Psych-Appeal’s Meiram Bendat says you’re not alone. The vast majority of providers pay little attention to the fine print when they sign a managed care contract and are unaware that these agreements tend to be highly restrictive, one-sided contracts that offer minimal protection to healthcare providers.

The consequences of entering into these lopsided agreements can be significant.

Fortunately, as Bendat writes, there is a solution. Since the law generally permits consenting parties to negotiate contract terms that do not violate public policy, providers can negotiate network agreements that:

• Reject arbitration clauses or class action waivers.
• Insist on sufficient time frames in which to file administrative appeals.
• Establish access rights (even electronically) to mental health parity analyses and utilization review data before filing appeals.
• Limit utilization reviews to specified frequencies, durations, and information.
• Require interest for untimely processed claims.
• Prohibit retrospective reviews of preauthorized claims.
• Prohibit recoupments of paid claims after a set period of time.
• Mandate automatic reversals of denied claims when managed care companies fail to respond to data inquiries and/or appeals within established time frames.

This isn’t to say that managed care companies will agree to the above terms in a contract or be willing to negotiate with psychiatrists. That’s why it behooves professional associations to support their members by advocating for uniform due process terms in managed care contracts. Uniformity of these terms would not only promote psychiatrists’ business interests, but also enhance their ability to most effectively care for patients.