ASC Managed Care Negotiation Best Practices: Tip #3

In our first tip, we discussed the preparation needed for successful contract negotiation. Our second tip explained the contract language that needs to be addressed regarding covered services and reimbursement. This tip covers other areas of contract language that require close scrutiny.

Tip #3: Defining Terms and Terminology (Part II) — Miscellaneous Contract Terms

All terms should have detailed, explicit definitions that are understood and agreed upon by both parties.

Timely Filing

The contract should specify a definitive time limit for filing claims. The best option for this clause is one year — the same as Medicare allows.

Appeal Guidelines

Provisions for appeal include time limits and detailed requirements. Due to the many timely complications that may occur in providing requested information for the appeal, negotiate as long a time period as possible.

Prompt Payments

The contract should contain a clause specifying the managed care company’s responsibility for prompt payments that follow state regulations and are enforceable.


Clarification is needed to determine how overpayments will be recouped by the managed care company (e.g., refunds, “take-backs”).


The contract should clearly indicate the duration of the agreement, amendment guidelines and renewal options.

Termination of Contract

Determine time required for notification of termination, including clauses covering termination with or without cause for both parties.

Hold Harmless Clause

In the event of the managed care company’s dissolution, the contract should specify whether the ASC can bill the patient/policyholder for payment of services provided.

Records and Confidentiality

The contract should be specific about expectations of patient confidentiality and HIPAA compliance for both parties.

Quality Assurance and Utilization Review Process

The contract should outline what audits are performed, by whom and frequency.

Accreditation Requirements

The contract should specify whether the managed care company requires the ASC be accredited prior to issuing a contract. It should also specify what accrediting agencies it accepts (e.g., AAAHC, Joint Commission).

Special Requirements or Clauses to Avoid

Avoid unfavorable terms such as affiliate clauses, high malpractice requirements, requests for center’s financials and capitation.

Knowledge is Power

The two parts of "Defining Terms and Terminology" will help you recognize the most common terms and clauses you will encounter when negotiating your ASC’s managed care contracts. Keep in mind that most contracts are written to favor payers and that their negotiators are very experienced. After carefully reviewing the contract terms/terminology and receiving adequate explanations of any questions, you are ready to begin negotiations.

Access Tip #1 on Preparation and Tip #2 on Defining Terms/Terminology (Part I). Stay tuned for Tip #4: Questions and Keywords to Improve Negotiating Strategy.

Catch up on previous tips here.

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