Today I pose a very important question for you. Do your participation contracts that you sign with Medicare/caid, MCOs, MACs – do they even matter? Are these boilerplate contracts worth the ink and the paper? The answer is yes and no. To the extent that the contracts are written aligned with the federal and State regulations, the contracts are enforceable. To the extent that the contracts violate the federal regulations, those clauses are unenforceable. The contract can even, at times, be more stringent or contain more limitations than the federal regulations. One thing is for sure, these contracts can be your worst enemy or your savior, depending on the clauses.

An Idaho client-provider of mine has been the victim of Optum-“black-hole-ism.” In this case, the “black-hole-ism” will save my client from paying $500k it does not owe. My client is the leading substance abuse (SA) provider in Idaho. Optum is managing Medicaid dollars, which makes it the Agent of the “single State agency,” the Department of Health of Idaho. 42 C.F.R. 431.10. See blog.

The Optum provider contract states that – “It is agreed that the parties knowingly and voluntarily waive any right to a Dispute if arbitration is not initiated within one year after the Dispute Date.” What a great clause. If only all contracts had this limiting clause.

In our dispute, Optum avers we owe $500k. The first demand we received was dated December 2018 for DOS 2016-2017. Notice Optum was timely back in 2018. That was when the client hired my team, and we submitted a rebuttal and initiated the informal appeal to Optum. Here’s where Optum gets sloppy. Months pass. A year passes. I hear crickets in the background. A year and a half passes. Who knows why Optum took a year and a half to respond? COVID happened. Black-hole-ism? Bureaucracy and red tape? Apathy? Ineptness?

Finally, we get a response in September 2020. We respond in October 2020. Our new response included a novel argument that was not included in the 2018 rebuttal. Our argument went something like: “Na Na Na Boo Boo, you’re too late per 7.1 Optum contract.” If we could have included a raspberry, we would done so.

Remember the clause? “It is agreed that the parties knowingly and voluntarily waive any right to a Dispute if arbitration is not initiated within one year after the Dispute Date.”

Well, 2020 is 3-4 years after the initial DOS at issue: 2016-2017. This time, the boilerplate contract is our friend.

Since there is also an arbitration clause, which is not your friend, we will be wholly dependent on an arbitrator to interpret the one-year, limiting clause as a logical, reasonable person. But I will be shocked if even an arbitrator doesn’t throw out this case with prejudice.