po box 2161
minden, nv 89423
phone: 775-267-5345 fax: 775-267-5415 cell: 775-721-0457 e-mail: bob@rskconsulting.biz
contract management specialist
contracting
the law of contracts has its origin, as do most or our laws, in the misty past as people devised ways to live and work together and to resolve differences that may arise in the course of living in close proximity to one another. as transactions became more than just “i will give you two projectile points for your large cutting tool” there had to be a method of ensuring an obligation would be met, other than resorting to violence. these “rules” became accepted by the society and became the “common” ways of doing transactions. thus, “common law” – that is the way we always handle an issue – became prevalent and devolved into formal written laws. formalization of the law was needed to insure continuity of transactions between individuals, companies and countries, until today when there are probably the greatest variety of contracts and laws governing them history has ever encountered.
contracting can come in many guises and forms. there are financial arrangements such as mortgages, student loans, credit cards, etc. it may be an agreement between a company and a medical practitioner to perform medical or pharmaceutical research or a clinical trial. another is the one presented by a managed care company or insurance company to become a member of a preferred provider network, health maintenance organization or similar device to “direct” patients to a particular practitioner.
the above examples do not cover the wide spectrum of contracts but begin to give the idea of the complexity of the field. contract is defined in farnsworth, contracts, as: “…a writing containing terms on which the parties have agreed” which is the more common usage of the term. attorneys on the other hand use “…the word in a more technical sense to mean a promise, or a set of promises, that the law will enforce or at least recognize in some way” (farnsworth, 1999, p.3). rohwer and skroki in their book, contracts in a nutshell, cite the definition given in the “restatement, second” as “a contract is a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty” (p. 1).
thus, a contract is a promise or set of promises that will be enforced by the courts, with the additional proviso that there must be a binding exchange of goods or services on the part of promisee. applying this to the agreements between a medical practitioner and a managed care or insurance company, there is generally a mutual exchange of promises to perform or render future services for both parties. the managed care company requires that the medical practitioner provide services for the “members” of their company for a reduction in the practitioner’s usual fee for the service and the managed care company agrees to encourage their members to use the practitioners on their “provider list”.
this is an over simplification since there are generally several things that the practitioner is required to do and the managed care/insurance company will do other things in return. most are fairly innocuous such as “we will list you in our provider directory and you must carry malpractice insurance”. others may be more restrictive: “for the practitioner “you must guarantee to be available twenty-four hours a day, seven days a week. the company will be open from eight in the morning until five o’clock in the afternoon, monday through friday eastern standard time.”
as with any contract or agreement, managed care/insurance agreements must be read carefully before a decision is made to sign or reject the terms and conditions of the contract. this can be done by a highly experienced staff member, an attorney or a consultant with extensive experience reading and interpreting insurance and managed care contracts. most medical offices do not have the highly experienced staff nor are they willing to pay an attorney to review every managed care/insurance agreement. from the enclosed biographic information you will find i have extensive experience in reading and interpreting insurance and managed care contracts.