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Provider Contracting and Termination for Non-Quality Reasons

Procedure Name: Provider Contracting and Termination for Non-Quality Reasons Policy Number: 5003pr
Policy Manual Section: Provider Network Management Related Procedures:
Issuing Department: Provider Network Management and Pharmacy
Approving Authority: Provider Network Management
Original Procedure Date: 1/98
Revision Date(s): 11/03, 1/05, 5/09, 1/10, 2/13, 5/14
Review Date(s):
(No Revisions)
5/14
Replaces Policy Number:

  1. Procedure Purpose/Statement of Intent/Background
    • “HealthPlus” shall refer to HealthPlus of Michigan, Inc. and its affiliated entities, HealthPlus Partners, Inc., HealthPlus Options, Inc., and HealthPlus Insurance Company, unless otherwise stated.
    • “MedicarePlus” shall refer to the HealthPlus Medicare Advantage Prescription Drug branded products, individual or employer group, which it operates per annual contracts with the Centers for Medicare and Medicaid Services.
    • The procedure shall pertain to the Commercial, Medicaid, MIChild, County Health Plan, and Medicare product lines and their respective products e.g., HMO, PPO, TPA, and Medicare Part D.
    • To ensure that the organization complies with all applicable state and federal laws and regulations, including, but not limited to, those pertaining to the Medicaid, Medicare, and Medicare Part D programs.
    • To provide direction and processes in regard to the implementation of terminating a provider for non-quality reasons.
    • Chapter 6 of the Medicare Managed Care Manual1 specifies that a Medicare Advantage Organization (MAO) that operates a coordinated care plan or network Medical Savings Account plan must provide for the participation of individual physicians and the management and members of groups of physicians, through reasonable procedures that include: written notice of rules of participation including terms of payment, credentialing, and other rules directly related to participation decisions; written notice of material changes in participation rules before the changes are put into effect; and written notice of adverse participation decisions and a process for appeal.
    • Chapter 6 of the Medicare Managed Care Manual1 specifies that an MA organization must give the affected physician written notice of the reasons for the action, including, if relevant, the standards and profiling data used to evaluate the physician and the numbers and mix of physicians needed by the MA organization; must allow the physician to appeal the action, and give the physician written notice of his/her right to a hearing and the process timing for requesting a hearing and must ensure that the majority of the hearing panel members are peers of the affected physician. If an MA organization declines to include a given provider or group of providers in its network, it must furnish written notice to the affected provider(s) on the reason for the decision. An MA organization and a contracting provider must provide at least 60 days written notice before terminating the contract without cause.
     
  2. Definitions
    Physician
    The following specific individuals who are legally authorized by the State of Michigan to practice in the scope of services performed:
    • Doctor of medicine of osteopathy
    • Doctor of dental surgery or dental medicine
    • Doctor of podiatric medicine
    • Doctor of optometry; or,
    • Chiropractor
    Practitioner
    An individual, including a Physician, licensed, certified, or authorized in accordance with state law to practice a health profession in his or her respective state.
    Provider
    A practitioner, or licensed hospital, pharmacy, institution or organization that renders health care services.
    Medicare Advantage Organization (MAO)
    A public or private entity organized and licensed by a State as a risk-bearing entity (with the exception of provider-sponsored organizations receiving waivers) that is certified by CMS as meeting the MA contract requirements.
    Centers for Medicare and Medicaid Services (CMS)
    The federal agency that runs the Medicare program and oversees Medicare Advantage and Part D plans. In addition, CMS works with the States to run the Medicaid program. CMS aims to ensure that the beneficiaries in these programs are able to get high quality health care.
    Summarily Suspended
    A temporary revocation of a practitioner’s license. If there is an immediate risk to the public a summary suspension of a practitioner’s license may be invoked until a full investigation can be conducted.
     
  3. Procedure Statement
    1. Contracting with Providers
      1. HealthPlus may enter into a contract with one or more Providers to provide medical services and control health care costs through appropriate utilization of health services while achieving quality of care. HealthPlus may limit the number of Provider contracts if the number of existing contracts is sufficient to assure reasonable levels of access to care by members.
         
      2. With respect to any new service areas approved by the State of Michigan for HealthPlus, HealthPlus will:
        1. Give notice to Providers upon request of the Provider application period;
        2. Publish the notice in a newspaper with general publication in the service area at least thirty (30) days before the Provider application period; and
        3. Provide a sixty (60) day Provider application period.
         
      3. Every four years, HealthPlus will, for the entire HealthPlus’ service area:
        1. Give notice to Providers upon request of the Provider application period;
        2. Publish the notice in a newspaper with general publication in the service area at least thirty (30) days before the Provider application period; and,
        3. Provide a sixty (60) day Provider application period.
         
      4. Generally, HealthPlus will:
        1. Notify the Provider applicant in writing whether the applicant is rejected or accepted, within the later of:
          1. Ninety (90) days after the close of the Provider application period; or
          2. Thirty (30) days following the completion of the credentialing process (i.e. HealthPlus Board decision) or within sixty (60) days of the Credentialing Committee’s decision whichever occurs first; and,
           
        2. If the Provider is denied participation, state in writing the reasons for rejection, citing one or more of the HealthPlus’ standards.
         
      5. The Provider contracts will be based upon the following standards:
        1. Standards for maintaining quality health care;
        2. Standards for controlling health care costs;
        3. Standards for assuring appropriate utilization of health care services;
        4. Standards for assuring reasonable levels of access to health care services; and
        5. Other standards considered appropriate by HealthPlus.
         
      6. The Provider contracts will require the following:
        1. Providers will cooperate with Quality Improvement (QI) activities to improve the quality of care and service provided to HealthPlus members
        2. Providers maintain confidentiality of member information and records
        3. Providers will comply with all HealthPlus policies and procedures concerning quality improvement
         
    2. Conditions for Contracting

      A provider may be denied participation for reasons including, but not limited to:

      1. HealthPlus has an adequate number of Providers sufficient to assure reasonable levels of access to services by members;
      2. The Provider’s state license is at a limited, suspended, or revoked status;
      3. If applicable, the Provider’s DEA or controlled substance license is suspended or revoked;
      4. If applicable, the Provider is suspended, terminated, or otherwise excluded from participation in the Medicare or Medicaid program, or other Federal Government Programs.
      5. The Provider is excluded by law to participate with HealthPlus; or
      6. The Provider does not successfully complete the HealthPlus’ credentialing process.
       
    3. Terminating Providers for Non-Quality Reasons.
      1. HealthPlus will provide to any contracted Provider, upon request to HealthPlus, a written explanation of reason(s) for the termination.
      2. HealthPlus and any Provider must give at least sixty (60) days or more, dependent upon other contractual requirements, written notice to terminate an agreement without cause.
      3. A Provider may be terminated with cause, pursuant to the time frame set forth in the Provider contract, by HealthPlus for reasons including, but not limited to:
        1. The Provider’s state license is limited, suspended, or revoked;
        2. If applicable, the Provider’s DEA or controlled substance license is suspended or revoked;
        3. If applicable, the Provider is suspended, terminated, or otherwise excluded from participation in the Medicare or Medicaid program;
        4. The Provider does not successfully complete HealthPlus’ re-credentialing process;
        5. The Provider does not have malpractice coverage or the malpractice coverage is inadequate;
        6. The Provider if applicable, loses his or her staff privileges at an affiliated hospital or other affiliated facility;
        7. The Provider breaches a term or terms of its provider agreement with HealthPlus.
         
      4. When HealthPlus learns that a Provider’s state license is summarily suspended, the Provider’s participation with HealthPlus will not be terminated, pending resolution of the summary suspension, or for a period of thirty (30) days following the summary suspension, whichever comes first. If a summary suspension is imposed, it is required that:
        1. The Provider or PO/PHO/Management organization will immediately cease all care and treatment of HealthPlus members;
        2. The Provider will immediately notify HealthPlus of the summary suspension, including details of the reason for the summary suspension;
        3. The Provider will immediately notify HealthPlus of arrangements made for the care and treatment of HealthPlus members;
        4. Provider Network Management will notify the Provider Information Management team to place the Provider at a closed accepting status for all new patients.
        5. Provider Network Management will notify Customer Service, Medical Management, and Pharmacy of Provider’s change in status and arrangements for coverage of the Provider’s members.
         
      5. Once a determination is made to terminate a Provider from HealthPlus, the following will occur:
        1. Provider Network Management or Pharmacy notifies the HealthPlus Legal Department of intent to terminate the Provider.
        2. HealthPlus’ Legal Department drafts written notification with effective date of intent to terminate, reason for termination, and appeal rights, if appropriate; and,
        3. HealthPlus’ Legal Department mails a certified written notice of intent to terminate to the Provider, in accordance with the termination provisions in the Provider contract.
         
      6. After any appeal(s) by a Provider are declined or exhausted, the following will occur:
        1. HealthPlus’ Legal Department will inform the Director of Provider Network Management and Pharmacy Department of the effective termination date; and,
        2. Provider Network Management staff will complete and attach a copy of the Provider Change form to the Provider’s record in the VISTAR system.
        3. Provider Information Management team will enter Termination in the Vistar and Amisys systems.
         
       
    4. Appeal Procedures for Termination of Providers for Non-Quality Reasons
      1. Non-quality reasons include, but are not limited to, failure of the Provider to meet certain HealthPlus requirements. Examples of such requirements include, but are not limited to, current malpractice coverage, adequate malpractice coverage, a current unrestricted state license, applicable board certification pursuant to HealthPlus’ credentialing requirements, or other requirements of the service agreement with HealthPlus.
      2. With respect to Physicians only, if HealthPlus suspends or terminates the agreement with cause for non-quality reasons, HealthPlus will give the affected individual Physician written notice of the following:
        1. The reasons for the action, including, if relevant, the standards and profiling data used to evaluate the Physician and the numbers and mix of Physicians needed by HealthPlus;
        2. (for Primary Care Physicians) that the Physician’s acceptance status for new members will be changed by HealthPlus to “not accepting” until any potential appeal outcome is resolved; and,
        3. The Physician’s right to appeal the action, if required by law, and the process and timing for requesting a hearing as follows:
          1. HealthPlus’ Legal Department will prepare a letter to the Physician that HealthPlus intends to suspend or terminate the service agreement. The letter will give a brief explanation of the reasons for the proposed action, notify the Physician of his/her right to elect to follow this appeal process or any process that may be available under his/her service agreement, summarize the appeal process, and clearly state the Physician has the right to request a review on the matter within the next thirty (30) days (and that if the review is not requested within this time frame, that the Physician will be deemed to have waived his/her right to any appeal).
          2. HealthPlus’ Chief Medical Officer (CMO) or Provider Network Management VP or Director, as appropriate, will review, sign, and return the letter to HealthPlus’ Legal Department.
          3. HealthPlus’ Legal Department will send the letter via certified mail to the Physician.
          4. The Physician will have thirty (30) days from receipt of the letter to request an appeal.
          5. f the Physician does not elect to use either appeal process, HealthPlus’ Legal Department will notify the Director of Provider Network Management per paragraph C.5.a. above. No reporting of the action is required to be sent to the state or to the National Practitioner data Bank / Healthcare Integrity and Protection Data Bank. In instances in which the termination is related to the practitioner’s non-compliance with HealthPlus credentialing / re-credentialing criteria, the Director of Quality Management or the Manager of Credentialing will co-manage the appeal process with Provider Network Management, Legal, and the CMO.
          6. If the Physician elects to use the alternative appeal process (a review by a peer panel), the following will occur:
            1. Within thirty (30) days of being notified of the Physician’s intent to use the appeal process, the CMO or his/her designee will appoint three (3) peers of the Physician to sit on the review panel. These peers will be HealthPlus contracted Physicians that have the appropriate expertise, qualifications, and experience to address the issues raised in the appeal. The peers will not be in direct economic competition with the Physician, meaning that the peer Physicians will not be directly affected economically by the outcome of the appeal. If the appealing Physician objects to any of the peers on the review panel, the CMO will select another peer Physician.
            2. HealthPlus’ Legal Department will prepare a letter to the Physician that includes the details of the review (place, time, date, etc.). The letter will clearly state that if the Physician fails to appear at the review without good cause, he/she will forfeit the right to the review. The date of the review will not be less than (30) days after the date of the notice regarding the details of the review.
            3. The CMO, or his/her designee, will attend the review, but will not act as the Chair.
            4. The CMO will appoint one of the three (3) panel members as the Chair. The Chair may vote on all matters in the review.
            5. The rules of the hearing are as follows:
              1. The CMO will present the basis for the suspension or termination of the service agreement.
              2. The appealing Physician will be given the opportunity to state his/her position.
              3. Each party may present written material, including a written summary, and/or closing summary.
              4. Any other person may represent the appealing Physician at the review.
              5. A quorum will consist of two (2) of the three (3) peer Physicians. The final decision must be supported by at least two (2) of the three (3) peer Physicians. The CMO has no vote.
               
            6. The appealing Physician will not be provided additional rights to any other internal appeal, including a review by the HealthPlus Board of Directors.
             
           
         
      3. With respect to all other Providers (i.e. excluding Physicians):
        1. HealthPlus will not send a notice of any appeal rights to the provider.
        2. If the Provider elects to appeal per the appeal process in his/her service agreement, the Provider must follow the procedures in that appeal process.
         
      4. If HealthPlus terminates a Physician’s or other Provider’s agreement without cause it will provide a written notice to the provider least sixty (60) days prior to the termination. HealthPlus will not send a notice of any appeal rights to the Physician or other Provider.
       
      1. HealthPlus will not discriminate, in terms of participation, reimbursement, or indemnification, against any Practitioner who is acting within the scope of his or her license or certification under state law, solely on the basis of the license of certification. However, HealthPlus may:
        1. Refuse to grant participation to Practitioners in excess of the numbers necessary to meet the needs of HealthPlus members.
        2. Use different reimbursement amounts for different specialties or for different Practitioners in the same specialty; and
        3. Implement measures designed to maintain quality and control costs consistent with HealthPlus’ responsibility.
         
      2. After each Provider has entered into a contract with HealthPlus, HealthPlus will make available via the HealthPlus web, www.healthplus.org, a provider manual and/or the rules of participation including terms of payment, credentialing and other rules related to participation.
      3. Procedures to assist with continuity of care for members of terminating providers are included in Departmental Procedure No. PNM19pr (Continuity of Care for Enrollees of Terminated Providers/Practitioners) issued by the Provider Network Management Department.
       
     
  4. Implementation

    HealthPlus staff is responsible for establishing, publishing, and maintaining procedures and work rules to implement this procedure.


Source/Regulation

1www.law.cornell.edu/cfr/text/42/422.202