Depending on the clauses, contracts can be your worst enemy or your savior.
Today I pose a very important question to you. Do your participation contracts that you sign with Medicare/Medicaid, managed care organizations (MCOs), and Medicare Administrative Contractors (MACs) – do they even matter? Are these boilerplate contracts worth the ink and the paper upon which they written?
The answer is yes and no.
To the extent that the contracts are aligned with applicable federal and state regulations, they are enforceable. To the extent that the contracts violate federal regulations, those clauses are unenforceable. The contracts can even, at times, be more stringent or contain more limitations than the federal regulations. One thing is for sure: these contracts can be your worst enemy or your savior, depending on the clauses.
An Idaho client provider of mine has been the victim of Optum “black hole-ism.” In this case, a contract provision will save my client from paying $500,000 it does not owe.
My client is the leading substance abuse mitigation provider in Idaho. Optum is managing Medicaid dollars, which makes it the agent of the “single state agency,” the Department of Health of Idaho, pursuant to 42 C.F.R. 431.10.
The Optum provider contract states that “it is agreed that the parties knowingly and voluntarily waive any right to a dispute if arbitration is not initiated within one year after the dispute date.” What a great clause. If only all contracts had this limiting clause.
In our dispute, as noted, Optum argues we owe $500,000. The first demand we received was dated December 2018, for dates of service (DOS) in 2016 and 2017. Notice that Optum was timely back in 2018. That was when the client hired my team, and we submitted a rebuttal and initiated the informal appeal to Optum.
Here was where Optum got sloppy. Months passed. A year passed. I hear crickets in the background. A year and a half passed. Who knows why Optum took a year and a half to respond? COVID happened. Was it bureaucracy and red tape? Apathy? Ineptness?
Finally, we get a response in September 2020. We respond in October 2020. Our new response included a novel argument that was not included in the 2018 rebuttal. Our argument went something like: “you’re too late, per section 7.1 of the Optum contract.” If we could have included a raspberry, we would done so.
Remember the clause? “It is agreed that the parties knowingly and voluntarily waive any right to a dispute if arbitration is not initiated within one year after the dispute date.”
Well, 2020 is 3-4 years after the initial DOS at issue: 2016-2017. This time, the boilerplate contract was our friend.
Since there is also an arbitration clause, which is not your friend, we will be wholly dependent on an arbitrator to interpret the one-year limiting clause in a logical, reasonable fashion. But I will be shocked if even an arbitrator doesn’t throw out this case with prejudice.
Programming Note: Listen to Knicole Emanuel’s RAC Report on Mondays on Monitor Mondays, 10 Eastern.
In the last six weeks, my colleagues and I have dealt with two situations in which clinics either missed or did not receive the orange
EDITOR’S NOTE: This article was originally published Monday, Dec. 8 by RACmonitor as a special bulletin. Many people are still seething mad about Aetna’s devious
Please log in to your account to comment on this article.
Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.
Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.
Sepsis remains one of the most frequently denied and contested diagnoses, creating costly revenue loss and compliance risks. In this webcast, Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, provides practical, real-world strategies to align documentation with coding guidelines, reconcile Sepsis-2 and Sepsis-3 definitions, and apply compliant queries. You’ll learn how to identify and address documentation gaps, strengthen provider engagement, and defend diagnoses against payer scrutiny—equipping you to protect reimbursement, improve SOI/ROM capture, and reduce audit vulnerability in this high-risk area.
Only ICD10monitor delivers what you need: updates on must-know changes associated with the FY26 IPPS, including new ICD-10-CM/PCS codes, CCs/MCCs, and MS-DRGs, plus insights, analysis and answers to your questions from two of the country’s most respected subject matter experts.
As AI reshapes healthcare compliance, the risk of biased outputs and opaque decision-making grows. This webcast, led by Frank Cohen, delivers a practical Four-Pillar Governance Framework—Transparency, Accountability, Fairness, and Explainability—to help you govern AI-driven claim auditing with confidence. Learn how to identify and mitigate bias, implement robust human oversight, and document defensible AI review processes that regulators and auditors will accept. Discover concrete remedies, from rotation protocols to uncertainty scoring, and actionable steps to evaluate vendors before contracts are signed. In a regulatory landscape that moves faster than ever, gain the tools to stay compliant, defend your processes, and reduce liability while maintaining operational effectiveness.
Get clear, practical answers to Medicare’s most confusing regulations. Join Dr. Ronald Hirsch as he breaks down real-world compliance challenges and shares guidance your team can apply right away.
Federal auditors are zeroing in on Inpatient Rehabilitation Facility (IRF) and hospital rehab unit services, with OIG and CERT audits leading to millions in penalties—often due to documentation and administrative errors, not quality of care. Join compliance expert Michael Calahan, PA, MBA, to learn the five clinical “pillars” of IRF-PPS admissions, key documentation requirements, and real-life case lessons to help protect your revenue.
During this essential RACmonitor webcast Michael Calahan, PA, MBA Certified Compliance Officer, will clarify the rules, dispel common misconceptions, and equip you with practical strategies to code, document, and bill high-risk split/shared, incident-to & critical care E/M services with confidence. Don’t let audit risks or revenue losses catch your organization off guard — learn exactly what federal auditors are looking for and how to ensure your documentation and reporting stand up to scrutiny.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
