CRCR Managed Care Contracting and Payer Relations — Questions and Answers
Question 1: What does a 'fee schedule' in a managed care contract primarily define?
- The maximum reimbursement a payer will pay for specific services rendered by a contracted provider (Correct answer)
- The list of services excluded from coverage under the plan
- The copayment amounts owed by the patient at the point of service
- The timeline within which claims must be submitted to the payer
Correct answer: The maximum reimbursement a payer will pay for specific services rendered by a contracted provider
A fee schedule is the contractually agreed-upon reimbursement rate for each service or procedure code. It sets the ceiling on what the payer will pay the provider, regardless of the provider's billed charges.
Question 2: A 'carve-out' provision in a managed care contract refers to:
- A specific service or benefit that is excluded from the standard contract terms and governed by a separate agreement or rate (Correct answer)
- The percentage of claims the payer can deny without provider appeal rights
- A penalty clause triggered when the provider's readmission rate exceeds a benchmark
- A clause allowing the payer to terminate the contract without cause within 90 days
Correct answer: A specific service or benefit that is excluded from the standard contract terms and governed by a separate agreement or rate
A carve-out removes certain services (e.g., behavioral health, pharmacy, or high-cost procedures) from the main contract and subjects them to different pricing or a separate sub-contractor arrangement.
Question 3: What is the primary purpose of contract modeling in managed care contracting?
- To project the financial impact of a proposed payer contract before it is signed (Correct answer)
- To calculate the patient's out-of-pocket responsibility at registration
- To assign ICD-10 codes to the payer's most frequently denied diagnoses
- To determine whether a payer meets state licensure requirements
Correct answer: To project the financial impact of a proposed payer contract before it is signed
Contract modeling uses historical claims data and proposed rates to forecast expected reimbursement under a new or renegotiated contract, allowing providers to evaluate whether the terms are financially viable before signing.
Question 4: A 'most favored nation' (MFN) clause in a managed care contract requires the provider to:
- Offer the payer rates no higher than the lowest rate offered to any other payer (Correct answer)
- Accept all patients covered by the payer regardless of service capacity
- Submit claims electronically using the payer's proprietary billing portal
- Credential all new physicians with the payer within 30 days of hire
Correct answer: Offer the payer rates no higher than the lowest rate offered to any other payer
An MFN clause obligates the provider to give that payer its best (lowest) rate — if the provider later agrees to lower rates with another payer, the MFN payer automatically receives the same reduction.
Question 5: When a provider renders a covered service to a plan member but the service is NOT on the contracted fee schedule, what is the most appropriate first step?
- Refer to the contract language for an 'unlisted service' or 'gap fill' provision to determine the applicable rate (Correct answer)
- Bill the patient for the full billed charge since no contract rate exists
- Write off the entire charge as contractual adjustment
- Resubmit the claim using the nearest similar procedure code
Correct answer: Refer to the contract language for an 'unlisted service' or 'gap fill' provision to determine the applicable rate
Most contracts include a gap-fill or unlisted-procedure clause specifying how to price services not explicitly listed in the fee schedule — often as a percentage of Medicare or billed charges. This must be followed before billing the patient or adjusting the account.
Question 6: Which of the following best describes the role of a provider relations representative in managed care contracting?
- Serving as the primary liaison between the provider organization and the payer to resolve contract disputes, credentialing issues, and reimbursement discrepancies (Correct answer)
- Auditing clinical documentation to ensure charges match services rendered
- Processing patient insurance eligibility verifications in real time
- Coding outpatient encounters according to CPT and ICD-10 guidelines
Correct answer: Serving as the primary liaison between the provider organization and the payer to resolve contract disputes, credentialing issues, and reimbursement discrepancies
Provider relations reps facilitate the ongoing operational relationship between hospitals/physicians and health plans — handling contract interpretation questions, payment disputes, network status changes, and credentialing coordination.
CRCR Managed Care Contracting and Payer Relations
What does a 'fee schedule' in a managed care contract primarily define?