How group practices can avoid managed care contracting pitfalls

When negotiating contracts with managed care organizations, group practices should understand the potential pitfalls involved. The basic issues to be aware of are understanding the relative parties' negotiating positions, the business significance of fundamental terms, and the actual contract provisions. The most important clauses in contracts concern compensation and termination. Group practices should require that their contracts include clauses that provide the physicians with protection should utilization assumptions not be met. They also should be realistic about their ability to fulfill contract terms. In addition, contract terms should be clearly written, well-defined, and time-limited.