📝 5 Dangerous Clauses to Watch for in Your Payor Contract
Your payor contract isn't just paperwork—it controls how you're paid, when you're audited, and how much power the insurer has over your practice.
Unfortunately, most small healthcare organizations never read their contracts closely, and by the time a problem arises, it’s too late to renegotiate.
In this guide, we break down five common contract clauses that can quietly damage your revenue and leverage—and how to protect yourself.
1. ⚖️ Unilateral Amendment Clause
A unilateral amendment clause allows the payor to change the terms of your agreement without your approval.
That means they could:
Lower your reimbursement rates
Change documentation requirements
Enforce new billing policies—with no warning
What to Do:
Push for written notice requirements (at least 30 days)
Request the right to terminate the contract if key terms are changed
Without notice protections, you’re agreeing to a moving target.
2. 💸 Most Favored Nation (MFN) Clause
This clause requires you to offer the payor your lowest rate—even if another payer is part of a short-term discount or government program.
Why It’s Risky:
Locks you into your worst rate
Prevents pricing flexibility with new payors
Can hurt negotiations with Medicare Advantage or Medicaid MCOs
What to Do:
Negotiate to remove MFN clauses entirely
If that’s not possible, limit their scope (e.g., exclude government payors or cap the duration)
3. 🧾 Retroactive Recoupment Provisions
Some payor contracts allow recoupment years after they’ve paid your claim—usually after an audit or retroactive policy change.
Risks:
Surprise withholds or clawbacks
Financial exposure without clear timelines
Delayed recoupments triggered by vague audit terms
What to Do:
Limit recoupment timeframes (e.g., 12 months after payment)
Add language requiring joint resolution before withholds
4. 🛠️ Vague Dispute Resolution Language
Dispute resolution clauses that are unclear—or favor the payor—can leave you stuck in unfair arbitration or limit your legal options.
What to Look For:
Mandatory arbitration in the payor’s home state
No clear appeal process
Prohibition against using state provider complaint portals
What to Do:
Ask for neutral venues in dispute clauses
Confirm whether you're allowed to file formal complaints with your state’s Department of Insurance or Medicaid agency
5. 🧪 Overly Broad Audit Clauses
Audit language like "we may audit any records at any time for any reason" is far too broad and opens the door for fishing expeditions.
Why It’s a Problem:
Can trigger endless record requests
Increases risk of unjustified recoupments
Lacks safeguards for provider input or dispute
What to Do:
Define a specific audit scope and reasonable time limits
Require advance notice and the opportunity to respond before repayment is enforced
🧠 Final Thoughts
Payor contracts are binding legal agreements that directly impact your revenue, audit exposure, and long-term business stability. Even a 60-minute legal review could reveal clauses that are quietly costing your practice thousands—or exposing you to risk.
Need help reviewing or renegotiating a provider agreement? Let’s protect your practice before problems arise.
Hurley Law Group
Healthcare Law for Small & Midsized Providers
📞 308-383-1867
🌐 hurleylawgroup.com
✉️ eric@hurleylawgroup.com