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Can Physicians Terminate a Contract with a Healthcare Provider?

Healthcare provider contract

A physician’s bond with an insurance provider is sacred and allows them to further provide exceptional patient care. However, these contracts are not everlasting and may need to be revisited, or even terminated. It is advisable to consult an experienced healthcare lawyer to learn your legal rights in termination to avoid consequent claims.

Reasons for Wanting to Terminate a Contract

There are many reasons why a physician may forgo terminating their contract with a provider including:
● disagreement over reimbursement rates
● changes in contract terms
● failure to be included in the provider’s new offerings
● steering business away from other providers or new patients
● lack of communication/responsiveness
● no longer accepting certain insurance in their practice

Physicians should not feel tied to a provider if it is hurting their practice. However, they must undergo proper legal procedures to end an ongoing contract before it is to expire.

Legal Rights and Processes

Physicians will likely need to abide by the terms of the contract when terminating it to avoid any legal issues. This will include providing notice as outlined in the contract. In some cases, they may need to fulfill outlined obligations such as completing treatment for those covered by the health plan.

Certain circumstances, such as a breach or similar violations on the providers’ end, may warrant you to legally end the contract. It is in your practice’s best interest to seek legal advice before ending a contract. A healthcare law firm will be able to ensure there are no repercussions from the insurance company.

Consequences For Breaking Terms of Contract

Breaking a contract with a provider can lead to legal and financial penalties. The specific consequences will depend on the terms of the contract and the individual circumstances.

Some consequences to be mindful of are:
● Legal action
● Financial penalties as outlined in the contract
● Reputational damage, including problems obtaining new providers
● Unenrollment of patients covered by the said provider, and subsequent loss of revenues
● Poor patient care, including delays or forced need to find a new provider

All of these potential outcomes may have a large-scale impact on a practice and should be carefully considered. If possible, resolution and negotiation would be advisable before moving forth with breaking the contract.

healthcare insurance provider

Can My Provider Expel My Practice?

Healthcare providers have the right to expel a physician from their coverage and benefit plans if they:
● violate the terms of their contract
● fail to maintain appropriate professional standards
● engage in unethical or illegal conduct

Providers are regulated by the California Department of Insurance and are required to follow state and federal laws and regulations. If a healthcare insurance provider terminates a contract with their physician they are required to give ample notice. They must also provide the reasons for termination.

In California, physicians have outlined rights under the common law right to fair procedure. This prohibits insurance providers and other private entities from undergoing arbitrary expulsions. An insurance company, HMO, or other healthcare entity must provide a hearing or fair procedure. Failure to do so can result in a wrongful termination lawsuit.

Physicians have the right to appeal the termination through a CDI complaint. They also may be able to contest the expulsion through legal action if they believe it was unjustified. If you feel your provider wrongfully ended your contract, you may have the right to receive monetary recovery. Your healthcare attorney will evaluate your individual case to see if there are grounds to seek relief for wrongful termination.

Physicians should always be mindful of the contract’s conditions, and maintain high standards of ethical and professional conduct. As a precautionary measure, physicians should talk to a lawyer before signing a contract to ensure they understand its terms.

Contact a Healthcare Law Firm Near You

When it comes time to cut ties with an insurance provider, you want the best legal representation on your side. Our team is well-experienced in navigating litigation claims, securing a successful outcome in a California Supreme Court case. We will work closely with you from contract conception to termination to ensure your practice’s needs are properly reflected.

Contact us today to hear more about our services, and how we can protect your practice.