CMA has recently received a number of calls from physicians concerned about the new PacifiCare/United Healthcare contract. CMA reminds physicians that before signing a health plan contract, it is important to know what value that relationship will bring to your practice. Physicians do not have to accept bad contracts or contracts that are not mutually beneficial.

Physicians are advised to review payor fee schedules carefully to ensure that the proposed compensation is sufficient to maintain a medical practice. With respect to the PacifiCare contract, physicians should be aware that the fees vary dramatically and do not appear to follow a consistent percentage of Medicare. The rates offered in one region, for example, range between 75 and 86 percent of Medicare for an office visit and are as low as 43 percent of Medicare for some surgical procedures.

It is also crucial that physicians obtain and review a payor’s payment policies and the rules it uses to adjudicate claims. Without this information, you cannot make an informed decision about signing the contract. Of particular concern in the PacifiCare contract is a provision stating that reimbursement is subject not only to PacifiCare’s payment and coding policies, but also to those of other “participating entities.” Further complicating the issue, the contract states that different policies and procedures may apply to United Healthcare enrollees and to PacifiCare enrollees. Physicians should be aware of these variances and request copies of all administrative, policy, and procedure manuals and guides.

As a general rule, physicians should not sign a contract if they cannot meet all of its requirements. For example, the PacifiCare contract states that all business with PacifiCare, including claim submission, must be conducted electronically within one year of the effective date of the agreement. If your practice will not be able to submit electronic claims within t