Payer-Provider addendum

Guidelines On Enhancements in Payor/Provider Agreements

Approach

The proposed template addendum aims to provide the needed clauses that payors and providers can use to make their contracts FTA friendly.

An FTA friendly contract is one where, to the extent possible, the potential disputes that may occur between parties are anticipated, the evidence required by parties to prove their case is pre-defined, and so are the compensation computation mechanisms.

The benefits of an FTA friendly contract are two-fold:

1. Because there is less ambiguity, it reduces the likelihood of parties getting into disputes

2. Even if a dispute does occur, having an FTA friendly agreement enables the adjudicator (arbitrator/tribunal/ombudsman/court) to quickly adjudicate the dispute, thereby reducing the time spent litigating.

In order to do so, it is essential to first identify potential disputes. Based on a reading of the multi-party dispute document and the sample agreement, the following disputes could arise between a payer and provider:

1. Provider’s obligation to provide ‘reasonable care’ to the Members

2. Delayed payment of invoices by payor/defective invoice submitted by provider

3. Company’s right to levy penalty in the case of ‘proven error/omission’ by provider

4. Charges for services which are not detailed in the tariff list given by the provider to the payor.

In addition, the temaplte addendum also contains suggestions for modification of certain other clauses in a payor-provider contract.

In addition to the guidelines metioned in this document (specially the guidance for grievance redressal) the template is based on the following sample agreement between a Payor and a Provider. The clauses referred to in the addendum have been taken from the sample agreement.

Template - Addendum to Payer-Provider contract

Payers may execute addendums in the case of existing contracts. For new contracts, Payers may simply incorporate the clauses mentioned in the addendum into their drafts.