What Does a Managed Care Participation Agreement Actually Control?

A participation agreement sets the fee schedule, the covered services, the claim submission and appeal timelines, the amendment mechanism, and the conditions under which either side may leave the relationship. Most of a provider’s long-term revenue exposure is decided in that document rather than in any individual claim.

The provisions that matter most in New York are the ones that determine what a plan may change unilaterally. Under Public Health Law § 4406-c(5-a) and the companion Insurance Law provision, a plan generally must give notice before a reimbursement change that would reasonably be expected to have a material adverse impact on the aggregate payment to a health care professional. That notice obligation does not apply where the change is required by law or regulation, where it follows from a government fee schedule or from CPT coding revisions, or where the contract itself already specifies the fee schedule, reimbursement methodology, or an indexing mechanism.

Abrams Fensterman reviews participation agreements before signature and renegotiates terms that are already in force, with particular attention to amendment clauses, appeal timelines, termination provisions, and any language that purports to waive a right New York law makes non-waivable.

Can a Health Plan Terminate a New York Provider Contract Without a Hearing?

Generally no. Public Health Law § 4406-d requires a health care plan to give the professional a written explanation of the reasons for a proposed contract termination and an opportunity for a review or hearing. Insurance Law § 4803(b)(1) imposes a parallel requirement on insurers terminating a professional from the in-network portion of a managed care product.

The hearing panel is composed of three persons appointed by the health care plan. These protections do not apply in cases involving imminent harm to patient care, a determination of fraud, or a final disciplinary action by a state licensing board or other governmental agency that impairs the professional’s ability to practice. Any contract provision that conflicts with the section is void and unenforceable, which means a plan cannot contract around the hearing right.

For purposes of § 4406-d, a health care plan means an HMO licensed under Insurance Law Article 43 or certified under Public Health Law Article 44, or an IPA certified or recognized under Article 44. Which statute governs a given termination depends on how the payor is licensed, and that determination should be made before a response is sent.

Where the termination follows a disciplinary matter rather than a contract dispute, the license proceeding drives the outcome and is handled through our OPMC Defense practice.

How Long Does a New York Health Plan Have to Pay a Provider Claim?

Insurance Law § 3224-a requires an insurer, an Article 43 corporation, or an Article 44 HMO to pay a claim within thirty days of receipt if the claim is transmitted electronically, or within forty five days if it is submitted by paper or facsimile. The deadline applies unless the obligation to pay is not reasonably clear, or unless there is a reasonable basis supported by specific information that the claim was submitted fraudulently.

Interest accrues on late payment beginning thirty days after receipt of an electronic claim or forty five days after receipt of a paper claim. Amendments enacted in 2020 added a requirement that a claim be paid within fifteen days of the determination that payment is due.

A pattern of late payment, repeated requests for additional information, or systematic downcoding is rarely a single claim problem. Abrams Fensterman analyzes payment behavior across a claim population, which is often what converts an individual denial into a recoverable aggregate underpayment.

How Does a Provider Appeal a Denied or Retrospectively Denied Claim?

Insurance Law Article 49 and the parallel Public Health Law article govern utilization review and external appeal. Under Insurance Law § 4904, a provider may appeal an adverse determination rendered by a utilization review agent in connection with a retrospective adverse determination. Under § 4910(b), a provider has an independent right to request an external appeal in connection with concurrent and retrospective adverse determinations.

The provider deadline is shorter than the patient’s. Section 4914(b)(1) gives an insured four months to initiate an external appeal after receiving notice of a final adverse determination, while the insured’s health care provider has sixty days. Missing the sixty day window forfeits the external appeal even where the underlying denial was wrong, so the calendar should be set the day the final adverse determination arrives.

Abrams Fensterman prepares provider-initiated external appeals, assembles the clinical record supporting medical necessity, and coordinates the internal appeal that must generally precede it.

Can a Health Plan Recoup a Payment It Made Two Years Ago?

Insurance Law § 3224-b limits how far back a health plan may reach. A plan may not initiate overpayment recovery efforts more than twenty four months after the original payment was received by the provider. Before pursuing recovery of anything other than a duplicate payment, the plan must give thirty days written notice stating the patient name, the service date, the payment amount, the proposed adjustment, and a reasonably specific explanation of that adjustment. The plan must also give the provider an opportunity to challenge the recovery and must maintain written procedures for doing so.

The twenty four month limit does not apply where recovery is based on a reasonable belief of fraud, intentional misconduct, or abusive billing, where it is required by or initiated at the request of a self insured plan, or where it is required or authorized by a state or federal government program. A plan may also offset older overpayments defensively when a provider asserts underpayment going back the same distance.

This section addresses what a commercial payor may recover under its contract and the Insurance Law. Where a demand arrives instead from OMIG, a Recovery Audit Contractor, a UPIC, or a Medicare contractor, different procedural rules, appeal rights, and exposure apply, and that work is handled on our Insurance Audit and OMIG Audit Defense page.

Do Providers Need a Lawyer to Form an IPA or a PHO?

An independent practice association and a physician hospital organization are contracting vehicles that let otherwise separate providers negotiate with payors as a unit. Their value is leverage, and their risk is regulatory: how the entity is certified, what it may negotiate on behalf of members, and where joint negotiation crosses into conduct that antitrust law does not permit.

Abrams Fensterman structures IPAs and PHOs, drafts the member participation documents, and negotiates the downstream payor agreements the network is formed to obtain. The separate question of how an individual medical practice itself must be owned and organized under New York law is addressed on our Practice Formation and Corporate Structure page.

When a Payor Dispute Becomes Litigation

Most managed care disputes resolve through contract negotiation, the statutory hearing, or the administrative appeal. When they do not, the claim moves to court or arbitration as a breach of contract, a prompt pay, or a network access matter. Our litigation team handles that stage, described on our Health Care Litigation page.

Recovery of unpaid balances from patients, estates, or Medicaid follows an entirely different track and is covered on our Health Care Collection and Reimbursement Recovery page.

Who We Represent

Abrams Fensterman’s managed care client portfolio ranges from major health systems, to physician hospital organizations and IPAs, to the sole practitioner in a rural community of New York State. The firm is part of one of the most established health care law practices in New York, with offices in Lake Success, Brooklyn, White Plains, Rochester, and Albany.

Frequently Asked Questions