Ask the Expert: Payers Linking Cancellations of Separate Contracts

What are hospitals’ options to respond to insurers who insist that terminating commercial products also will terminate their Medicare Advantage products? In this example, the hospitals in question have all-product agreements that do not specify whether they can terminate one product?

Answer: The answer depends on the contract language. If the Medicare Advantage (MA) participation is through an addendum to the master agreement (which the master is likely for the commercial product), then terminating the master contract would likewise terminate the MA-related addendum. Sometimes contracts have language that allows for addendums or amendments to be separately terminated without terminating the master agreement, but that doesn’t work in the opposite direction.

Separate from the contract language, I’m not aware of anything preventing payers from utilizing the leverage from their MA plans as negotiating tactics. There may be some state laws that come into play, such as “Any Willing Provider” laws, which may impact payers’ negotiating tactics. Legal counsel would need to be consulted on whether that applies for the state in question.

This question was answered by: Craig Ganger, director, managed care & decision support, Premier Health and a member of HFMA’s Southwestern Ohio Chapter.

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