We’ve recently seen a number of high-profile healthcare mergers, and as these changes accelerate, we’ve been working to keep our clients informed of how they could be impacted by deals involving their health systems or organizations.
While some high-profile mergers draw the attention of the Department of Justice (DOJ) for possible anticompetitive purposes, keep in mind that the DOJ dropped its appeal to stop UHC’s recent acquisition of Change Healthcare earlier this year.
Health plan mergers can have far-reaching implications for various contract provisions beyond reimbursement rates and network participation. It’s important to consider the following contract provisions that could be impacted:
Clauses and items to consider
- Change of Control Clauses:
- Many contracts include provisions triggered by a change of control in one of the parties involved. A merger typically qualifies as a change of control event, which can lead to contract renegotiations or termination.
- Termination and Renewal Terms:
- Review contract termination and renewal clauses to understand how the merger might affect the terms of the agreement.
- Determine whether there are automatic renewal provisions and if they will be affected by the merger.
- Service Level Agreements (SLAs):
- Assess any SLAs related to claims processing, prior authorizations, or other services provided by the payer.
- Determine if there will be changes in service levels or quality standards after the merger.
- Access to Technology and Systems:
- Consider whether the merger will impact access to the payer’s technology platforms, such as electronic claims submission systems or patient management portals.
- Assess how any changes could affect your client’s operations and workflows.
- Data Sharing and Confidentiality:
- Examine data-sharing agreements and confidentiality clauses.
- Ensure that data security and patient privacy concerns are addressed, especially if there are changes in data management systems post-merger.
- Payment and Billing Procedures:
- Review payment and billing procedures, including invoicing, claims submission, and dispute resolution processes.
- Ensure that these procedures remain consistent and efficient after the merger.
- Audit Rights:
- Determine if there are provisions allowing the payer to audit your client’s practice for compliance with contract terms.
- Assess whether the frequency or scope of audits might change.
- Provider Directory Listings:
- Examine provisions related to provider directory listings, as these may change following the merger.
- Ensure that accurate information is maintained for patients seeking care.
- Credentialing and Provider Enrollment:
- Understand how the merger will impact the credentialing and provider enrollment process.
- Determine if the new entity will require your client to undergo recredentialing or if existing credentials will be recognized.
- Dispute Resolution and Mediation:
- Review dispute resolution and mediation clauses to anticipate how disputes will be handled in the event of contract disputes arising from the merger.
- Contract Amendments and Notifications:
- Assess how the merged entity will communicate changes in contract terms and amendments.
- Ensure that your client is notified promptly of any changes and understands the process for accepting or objecting to them.
- Compliance and Regulatory Requirements:
- Stay updated on changes in compliance requirements and regulatory obligations that may be triggered by the merger.
- Ensure that your client’s practice remains in compliance with all applicable laws and regulations.
- Provider Network Adequacy:
- Consider provisions related to network adequacy standards and the impact of the merger on network size and composition.
- Provider Termination Procedures:
- Understand how the merger may affect the process for provider terminations or non-renewals and the associated timelines and notification requirements.
Looking ahead
If you stand to be impacted by a merger or acquisition and would like to further understand the potential impact to your lab or practice, please reach out to us directly for a free consultation.