Introduction

Private health insurance carriers in the United States are responsible for providing coverage to more than 70 percent of the country’s population. This expansive operational footprint is underpinned by an equally broad network of providers comprising thousands of healthcare professionals, primary care doctors, specialists, and hundreds of hospitals. 

As a result, the success of every insurance product in the portfolio of a typical private carrier is dependent on the company’s ability to sign the widest selection of professionals specializing in diverse medical and therapeutic areas. After all, individual buyers are more likely to invest in a product that enables them to gain seamless access to quality healthcare.

However, signing providers into a network is a complicated affair. Insurers need to draw up multiple contracts and negotiate favorable terms with them, all the while ensuring compliance with state and federal regulations. 

Typically, insurers onboard providers to a network through a Participating Provider Agreement (PPA). This agreement establishes the terms for provider credentialing, claims submissions, timely reimbursements, dispute resolution, renewal or termination of the contract, and the fee for services.

Broadly speaking, the conventional contracting process isn’t tuned all that well to take on the scale and risks associated with such complex requirements. To begin with, PPA templates are usually treated as boilerplate documents, which means that they could be misaligned with evolving regulatory requirements. In turn, during the contract negotiation process, risk elements such as missing clauses and clause deviations could go unaddressed. 

Moreover, if post-execution changes are not easily auditable, it could lead to conflicts at the time of claims submissions and payments. In the absence of an automated monitoring and notification system in place, insurers could run the risk of missing contract renewal deadlines, which could lead to discontinuation of service by a network provider.