• Ernest Sari

The Importance of Knowing Your Contracts

As a provider, it is important that you are completely and totally aware of your contracts with all of the insurance companies that you work with. Being knowledgeable of your contracts with various insurances that you deal with can determine the success or fall of your practice.


So you might be asking, what are contracts?


Well, Contracts specify the reimbursement rates for the services that you have provided to your patients.


There are two different types of contracts between a provider and an insurance company:


  • In-Network refers to providers or health care facilities that enter into an agreement with a health plan to be part of their network of providers with which it has negotiated a discount or reimbursement rate. A pro of being an in-network provider is being listen in the payer's online provider directory, which can bring new patients who are members of the plan. There are also different types of in-network contracts there are fee-for-service, capitation, and all-inclusive to name a few.


  • Out-of-Network providers do not have contracts with a health plan but instead they are just added to the payer's directory without the benefits of being in-network. Out-of-network patients typically pay more than in-network because in-network providers have a contract with the health plan regarding reimbursement rates. With out-of-network, it is important to know if the patient you are seeing has out-of-network benefits, otherwise the claim will be denied.


It is also important to keep in mind the length of your contracts with payers. If a provider sees a patient while their contract is expired, the claims will not be processed by the insurance company.



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