Moving Away From PPO’s Can Be Legally Challenging – Contracts Really Do Mean Something

confusedWhat Should I Do?

By Molly Mulebriar

Tired to seeing your claim costs escalating, year after year despite representations from managed care intermediaries that cost saving “discounts” are ever increasing and have never been higher? And, you should thank PPO’s for saving you 50% or more off health care costs.

But, has now proven to your satisfaction the real truth behind ever increasing health care costs. You are finally ready to jump off the cliff into what you perceive as shark infested waters with the assurance you will (1) survive, (2) the sharks are more afraid of you than you are of them and (3) the cleansing currents will take you to an island paradise where health care costs are fair, reasonable, predictable and essentially static. Umbrella drinks abound.

umbrellaCleansing Currents To The Land of Umbrella Drinks

When you notify your PPO of your intention to terminate, you will probably get a call that will go something like this:

SNARKY PPO EXECUTIVE: “Hello, We got your letter of termination. Have you read your contract”

CLUELESS EMPLOYER:”Why, no, is there something in there that I need to know”?

SNARKY PPO EXECUTIVE “Yes, read it and let me know if you need any more provider booklets to distribute to your employees for the next two years”

Sure enough, there it is in plain sight within the PPO Agreement:

  1. This agreement will automatically renew for successive one (1) year periods unless either party gives the other party written notice of termination at least ninety (90) days prior to the Anniversary Date.
  2. During the term of this Agreement, and for a period of two (2) years following neither Payor, nor its Representatives, will directly or indirectly, enter into a contract with any Participating Provider, which provider is under contract with PPO, for the purpose of establishing a preferred provider network arrangement

What is the employer to do? In this case the 90 day notification has not been given to the PPO in a timely fashion which means the employer is handcuffed for at least another 12 months. And after that, the employer has a non-compete with the PPO for two more years.

Why would anyone sign an agreement like this????????……..Oh, I forgot, no one ever reads contracts these days…………..

mulebriar123Molly Mulebriar is an investigative reporterette from Waring, Texas and an infrequent contributor to this blog.