Why Providers Need to Carefully Negotiate the Complex Payment and Penalty Provisions Under Shared Savings Agreements

 “Shared savings agreements” or “physician incentive plans” are agreements between provider groups and carriers or the government wherein bonus payments are paid, or penalties assessed, pursuant to a contractually agreed upon formula designed to measure quality-based performance over a given time period.

As these relatively new agreements can be highly technical and the mechanics of the bonus calculation quite opaque (often by design), provider groups tend to take the bonus calculations made by the payer at face value, without challenging the carriers’ math or reading the agreement. This can be a costly mistake for you and your constituent medical practices. Providers should have these agreements meticulously reviewed and negotiated by experienced counsel, having the bonus and penalty amounts to be paid or assessed by payers verified and vigorously challenged if non-compliant. Unaccustomed to facing pushback from provider groups represented by competent counsel when bonus time comes around, some carriers will seek to negotiate a quick and quiet settlement in lieu of facing the prospect of a lawsuit in which the nuts and bolts of their shared savings calculation machinery could be put under a judicial, and likely public, microscope.

Frier Levitt has extensive experience helping practices enforce their rights under shared savings agreements, often while avoiding costly litigation. Contact us today to speak to attorney regarding your practice’s shared savings agreements.

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