Navigating the complexities of healthcare contracts can be a daunting task for both private practice owners and healthcare facility administrators. When the time comes to end a contract, it is crucial to approach the process with careful consideration and adherence to best practices to help better ensure the transition is smooth and complies with applicable regulations.
Step 1: Review the contract.
The language of the contract guides these decisions. It is important to thoroughly reviewing the existing contract for a termination clause. This section will likely outline the necessary steps for ending the agreement, including notice periods, any required grounds for termination, and responsibilities post-termination.
Step 2: Consider the options for termination.
There are many ways to achieve this goal, whether a physician group or healthcare facility wants to end the agreement. These include:
- Negotiations. It can help to attempt to negotiation new terms or a transition out of the agreement.
- Lawsuit. Litigation may be necessary if the other party will not agree to the proposal.
- Patience. In some cases, it is best to wait the contract out. Most contracts in these types of relationships have expirations. If possible, consider waiting until the expiration date.
In the last option, a failure to renew the contract can mean that the arrangement simply ends. This was the method used recently when a healthcare facility in Billings, Montana decided to add its own anesthesiology department. Instead of terminating the agreement with a private practice that offered these services, the hospital system waited for the contract to expire and is building its own department to meet these needs.
Step 3: Take steps to ease the transition.
Once a plan is in place there are additional steps that can help ease the transition. For example, it can prove helpful to plan the termination to coincide with the end of a billing or service cycle to minimize disruptions for both parties. Consider the impact on patients and ensure a transition plan is in place to maintain continuity of care. You may also need to inform patients and staff of any upcoming changes.
Additional considerations before moving forward with a termination can include:
- Financial obligations. Identify and address all outstanding financial obligations. This can include final payments, refunds, or settlements.
- Internal audits. It may be wise to conduct an audit to verify that all services billed and paid for have been delivered according to the contract. Resolving any discrepancies now can prevent legal issues later on.
- Documentation. Keep detailed records of all correspondence and decisions made during the termination process. Documentation can protect your interests if disputes arise after the contract has ended.
Terminating a healthcare contract can be a complex process, but with careful planning, clear communication, and a focus on compliance, it can be managed effectively. Remember to always prioritize the welfare of patients throughout the transition and seek expert advice when needed. These tips can help to better ensure private practice owners and healthcare facility administrators navigate the end of a contract with confidence and integrity.
Attorney John Rivas is responsible for this communication.