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Tip of the week, part two: Consider legal infrastructure to prepare for PROMETHEUS contracting

Managed Care Weekly Advisor, July 11, 2007

Unlike existing pay-for-performance agreements, which are not typically documented in enforceable contract terms, the PROMETHEUS (provider payment reform for outcomes, margins, evidence transparency, hassle-reduction, excellence, understandability, and sustainability) payment model sets forth explicit, legally binding obligations. There are several key issues that payers and providers should consider during negotiations and contracting.

  1. Structure of provider networksPROMETHEUS recognizes existing credentialing and network participation mechanisms, as well as existing payment structures, and rate agreements between payers and providers.

  2. Amendments to existing plan-provider rate agreements Basic payment and rate structures between plans and providers remain in place for everything not paid under PROMETHEUS. The PROMETHEUS services are treated in a separate amendment. Once a plan and provider have established a price for the provider's component of the evidence informed case rate, (ECR) the rate should be documented in an amendment, including when and how payments will be made, how interest will accrue on the performance contingency funds pending their payout, how the scorecard is applied, and how and when payouts will be made from the performance contingency funds.

  3. Amendments to managed care contracts For cases for which PROMETHEUS payment applies, amendments to existing managed care contracts should eliminate requirements to adhere to the plan's utilization management, medical management, and claims documentation requirements. Any restrictions on which personnel may perform services also should be eliminated, because PROMETHEUS doesn't distinguish whether a physician, nurse practitioner, or physician assistant provides a particular service.

  4. Termination clauses A contract amendment should document the triggers for a provider's termination from PROMETHEUS, the notice mechanisms, and the appeals process. The failure of a provider to implement PROMETHEUS effectively should not necessarily end its participation in the plan's network.