Single Case Agreement 101
Single case agreements are either legally binding agreements or letters of agreement, addressed by insurers and/or facilities to providers which set forth the terms under which a provider will provide healthcare services to an individual patient covered by the insurer. They typically are used in the healthcare industry to obtain prospective prior authorization approval. However, more recently, Medicare has allowed for them in certain circumstances. They are the subject of the CMS guidance effective February 2, 2006, on CMS processes for and use of Single Case Agreements , attached.
They fall within the bucket of ‘single case arrangements’, which are referred to as one-off contracts which deviate from the standard terms that practitioners usually see for contracts with payers but instead are negotiated by the parties on a case-by-case basis. A few examples where they may be used: A client who submits bills for services rendered to payer deducts the retainer from the bill; a client enters into a retainer with a lawyer to pre-pay for legal services at a discounted rate in return for future work; a physician agrees to provide retrospective coverage for a patient.
When do Single Case Agreements Apply?
There are many situations in which single case agreements can be used. One of the most common is when a person is already receiving medical service from a provider who is not a Participating Provider but needs additional or different medical services that falls within the scope of the provider’s expertise. A single case agreement may also be appropriate in other situations, such as when a person needs a unique or specialized medical service for which there is no Participating Provider.
Some examples of situations in which a single case agreement is appropriate include the following:
i. Out-of-network facility-based services. Often a participant will be referred to a non-network facility by his or her HCP (e.g. hospital, urgent care center) because that facility has services that the participant needs that are not available at a Participating Provider or facility. For example, a participant may be referred to an out-of-network long-term acute care hospital after spending several days in an acute care hospital or having surgery if they need skilled nursing services after an accident; another would be a referral to an out-of-network skilled nursing facility if a participant needs advanced wound care after a severe burn or laceration.
ii. When a different Participating Provider does not provide services within the participant’s area. A participant may be injured or diagnosed with a condition requiring medical care at a time or location away from his or her home, and that medical care time-sensitive. For example, a participant could be on vacation in a location without access to a Participating Provider, but then suffers a stroke requiring immediate medical treatment by a Participating Provider.
iii. Specialized care. Some treatment may not have been proven through clinical trials enough to become a standard-of-care treatment. Due to the lack of clinical trial data, the medical services are unlikely to be covered by a Participating Provider. This would occur with, for example, rare cancers, blood disorders, neurological disorders, and/or degenerative disorders, requiring a physician with specialized training and experience with the specific condition. An example could be a rare nerve disorder, Peripheral Axonal Neuropathy, requiring vascular neurologist to identify the underlying cause of the nerve damage, or a rare and rapidly increasing cancer, Ewing’s Sarcoma, requiring a surgical oncologist who has performed fewer than 5 of these surgeries per year.
Components of Single Case Agreements
The key elements of a single case agreement include the duration, scope of services, payment terms, and coverage limitations. A single case agreement usually lasts for a specific time period, such as one year or until the even of a specific number of visits. In these instances both the covering provider and the health plan are fully aware of the end date of the relationship, if known. In certain cases, circumstances may cause the parties to renew the agreement prior to expiration of the term. However, as stated above, most single case agreements do not have an established end date and will remain in effect until either the member no longer requires the services or the specific number of visits has been reached.
With regard to the scope of services, single case agreements for specialists usually cover a certain number of visits to a provider (i.e., three visits over the span of six months). However, in other circumstances the agreement is for a specific procedure or course of treatment. It is critical to cover the explicitly stated services in the single case agreement so that there will be no misunderstanding regarding what services are covered. This is particularly important when providing psychological services to a specific population, such as children. Coverage against professional liability claims is also a key component of single case agreements. For example, if a specialist is performing a particularly high risk procedure, such as spinal fusion surgery, the health plan may require that the specialist have a certain number of years of experience in performing this procedure or have completed a fellowship in that area.
Negotiation Strategies for Single Case Agreements
An essential role for legal representatives is to advise providers on the negotiation of single case agreements, which often is the sole avenue for maintaining access to care for high need members when insurers adopt restrictive network policies.
In most situations negotiations are successful. Attorneys who spend a lot of time negotiating single case agreements develop their own techniques, but in guiding clients they also often develop rules of thumb.
General Rules
Do not negotiate a single case agreement for less than 30 days. The negotiations themselves take time and an agreement for less than 30 days may leave the patient without coverage at the end of the initial period. Most insurers would welcome an agreement for a longer period of time.
Involve the patient and the provider. Sometimes the patient and the provider have the most knowledge and become the best advocates for approval. Insurer denials often can be overcome with good information and persistent follow up.
Don’t ask for retroactive payment for services already rendered. Most insurers will flatly refuse to approve payment for services that have already been provided under the contractual term.
Don’t rush the process. While some negotiations may be emergency- or urgent-oriented, most can be negotiated over several weeks. Rushing into a negotiation often leads to an agreement that is too limited as it often is rushed through without sufficient information.
Tips for Providers
Involve the patient. Insurers often want to hear directly from someone who will receive the service about the necessity of the service.
Anticipate barriers. Anticipate the problems that may arise in the process to be ready to explain why the barriers to approval should be overcome. Often these barriers are clinical, but sometimes the barriers are with the issuer’s network policies or with the issuer’s internal processes in dealing with single case agreements.
Tips for Insurers
Be ready to negotiate. In many cases, we have found it easier for the insurer to simply agree to the limited period of time requested. In these circumstances, the request is either a "no brainer" for the insurer or the provider insists on a longer period of time than the insurer is willing to allow.
Encourage the patient to participate. Insurers sometimes feel uncomfortable involving members in the negotiation process. When the patient is part of the process, it takes away some of the uneasiness the insurer may have about the process.
For both providers and insurers, having as much information as possible about the situation can make for a more reasonable negotiation. If the patient has a well-carried out treatment plan that describes the steps taken to resolve the patient’s problems through a variety of treatment processes and procedures, both provider and insurer will find that focusing on the single case agreement will move the process along and produce a reasonable agreement.
Legal Aspects of Single Case Agreements
As much as we have tried to raise the awareness of parties negotiating a single case agreement that they are entering into a legal contract, it appears many providers and health plans are still completely unaware of the legal implications of contracting. That is not to say the parties do not know they are entering into a legal agreement, but rather most do not understand the consequences or ramifications of the legal agreement. When parties agree to be bound by certain terms and conditions, not only of state statute (i.e. licensure issues) but of their own contract language, including provisions related to provider licensure, credentialing, access to records, fee schedule, and termination, those terms, conditions, and provisions are then binding on the parties. Unfortunately, most parties signing a single case agreement or "non-network agreement" are rarely privy to the proposed contract language, which is not to say it is always drafted by attorneys, but it should be.
Generally when a single case agreement provision is proposed, the questions generate around the reimbursement provisions and some of the other miscellaneous provisions, and the inquirer does not delve much deeper into the agreement. Parties do sign single case agreements without ever so much as reviewing the entire document, which is an issue to be revisited in a later post. For the purposes of this post, the focus will be on the requirements set forth under applicable law.
For example, California’s Civil Code Section 3071, which governs non-network agreements, requires that every non-network agreement must be reduced to a writing and signed by the provider and the health plan. The non-network agreement also must contain the following provisions: 1) the agreement will remain in effect until the medical services are completed, 2) the health plan will pay the provider, 3) the provider is licensed to provide services under the agreement, 4) the provider will maintain timely and adequate medical records regarding the services provided, and the records must be made available to the health plan upon request, 5) and 6) the agreement may be terminated in accordance with state statute. From this example of state statute, you can see how parties may easily become aware of the general statutory requirements of such an agreement, but may not necessarily understand what their particular agreement means .
What happens if a party’s proposed term is not part of the final agreement? Is the party bound by such term? What happens if the provider violates the confidentiality provision, or does not have timely and accessible records? What if the agreement is terminated, but the provider has agreed to render care for a specified period of time (i.e. outpatient mental health outpatient being treated monthly for the next 18 months). Will the provider have legal recourse to claim against the health plan for reimbursement? There are many questions here that remain unanswered.
Other states may have similar provisions or entirely different requirements for non-network agreements and single case agreements. For example, New York recently enacted chapter 496 of the Laws of 2008, which dismantled a previously existing law prohibiting contracts between health insurance carriers and licensed naturopaths. That bill defines "single case agreement" to mean "a contract between a health care provider and issuer or independent practice association on behalf of a health care provider, that provides for the payment of compensation for health care items and services by an insurer, corporation or other entity identified in paragraph (c) of subdivision (1) of section 4406 of the public health law which is limited to a specific health care item or service or a specific health care item or service with a specific health care provider, or limited to health care services provided during a specified time period."
The laws governing single case agreements continue to change. Even when a contract provision is legal, does that provision make sound business and clinical sense? Without much thought, the provider may sign a single case agreement by a health plan that contains an arbitration provision. What happens if the provider has a dispute under the single case agreement? Or, what if the patient has a dispute with the provider under the single case agreement? How about if the provider has a dispute with another health plan or another provider from a financial standpoint? What if the provider has a dispute with any other party in acquiring a signature on the single case agreement? The provider may have very limited options in bringing a lawsuit, if there is an arbitration provision, which could preclude a lawsuit to be filed in Superior Court.
Not only should those negotiating single case agreements understand the legal and business ramifications for the terms and conditions of a single case agreement, parties should be encouraged to seek the advice of counsel during the negotiation process before signing such very important contracts.
Implications for Patients and Providers
Patients who can access single case agreements may benefit from receiving the medically necessary treatment they need to improve their health outcomes. For many patients, the medications or procedures covered under a single case agreement are not available elsewhere. Additionally, patients have the benefit of seeing a provider with whom they are comfortable. However, patients may face some disadvantages in participating in a single case agreement. Notably, patients may not have the same protections and rights as patients with a contractually-obligated health plan. For example, depending upon the applicable regulations, patients may not be protected from surprise or balance bills as readily. Moreover, patients may not have any recourse if a selected provider cannot or decides not to care for them anymore.
Providers, too, see benefits and drawbacks from entering into a single case agreement. Frequently, a provider who accepts a single case agreement agrees to accept the flat fee offered by the payer. In these circumstances, the flat fee may be lower than the provider would otherwise receive from the health plan for the same procedure or service. Moreover, providers may receive the flat fee and be required to write off additional costs associated with the treatment. Providers may be concerned that this process will lead to underutilization or lead to a delay in care for patients. When providers have limited or no contractual rights or protections under the applicable health plan, they may be at risk for surprise or balance bills. Finally, providers may fear that patients will track down yet another provider who is willing to bill their health plan for higher amounts than the flat fee signed under the single case agreement.
The Future of Single Case Agreements
Emerging trends in single case agreements are closely interwoven with the recent, significant changes in the healthcare industry, with the most needful to address being the healthcare cost shifting from providers to patients. In addition, constant changes in insurance practices and innovations in technology all have far-reaching implications for single case agreements.
One of the more interesting trends with a direct impact on single case agreements is the emergence of high deductible insurance policies with health savings accounts (HSAs). The question arises as to whether the insurer or patient is responsible for such expenses as deductibles, which are often high due to the plans having low premiums.
New state laws, legal rulings addressing networks, and the use of telehealth continue to evolve. Healthcare providers will have to navigate those developments to determine whether patients can seek single case agreements with out-of-state providers with a non-network insurer .
In addition to the above concerns, the Veterans Administration is moving forward with its "VETS First Contracting Preference Program." Two new regulations have been promulgated which give veteran-owned small businesses (VOSBs) and service-disabled veteran-owned small businesses (SD VOSBs) three major advantages: (1) set asides; (2) sole source justification; and (3) price preference over all other contractors. Not only does this impact the VA’s shopping practices for single case agreements but also potentially impacts hospital and other provider business recruiting for specialty services.
Changes from Medicare relative to physician reimbursement and network arrangements potentially have the largest impact on overall managed care activities relative to the use of single case agreements. Although there are still some questions relative to whether physicians will be appropriately compensated at the point of service, it is clear that the growth of physicians’ employment by hospitals has direct influence on the physicians’ insistence on being part of a major network.