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Module 11: Out-of-Network Requests & Continuity of Care
Section 4: Negotiating Single-Case Agreements
An advanced lesson in the art of the deal: mastering the language, tactics, and process of establishing a formal contract for out-of-network care.
SECTION 11.4
From Advocate to Negotiator: Securing the Single-Case Agreement
Moving beyond clinical justification to engage payers in the creation of a temporary, patient-specific contract.
11.4.1 The “Why”: Formalizing the Exception to Guarantee Access and Financial Protection
You have done the forensic work. You have proven the network is inadequate. You have crafted a compelling justification letter and assembled an irrefutable dossier of evidence. The payer’s clinical review team, faced with your unassailable case, has agreed that your patient’s out-of-network request is medically necessary. This is a monumental victory, but it is not the end of the process. It is the beginning of a new, even more advanced one: negotiation. An informal “okay” over the phone or a simple authorization number is not enough. For complex or ongoing out-of-network care, this verbal agreement must be formalized into a binding, temporary contract between the payer and the out-of-network provider. This contract is known as a Single-Case Agreement (SCA) or Letter of Agreement (LOA).
Why is this formal step so critical? Because without it, you leave the patient and the provider financially vulnerable. An SCA goes beyond simply approving the service; it meticulously defines the terms of engagement. It specifies the exact services covered, the duration of the agreement, and, most importantly, the reimbursement rate the payer will pay the provider and the cost-sharing for which the patient will be responsible. Without a signed SCA, an out-of-network provider could perform the approved service and then “balance bill” the patient for the difference between their full charge and the amount the insurance company decides to pay—a difference that could amount to tens or even hundreds of thousands of dollars.
This section is designed to elevate you from a clinical advocate to a skilled negotiator. This is one of the highest levels of practice for a PA specialist. You will learn to work collaboratively with the payer’s network management or contracting department and the out-of-network provider’s administrative team to hammer out the details of a fair and comprehensive agreement. You will learn the language of reimbursement, the key terms to include in any SCA, and the strategies to ensure the final document protects your patient from financial catastrophe. Mastering this process is the final step in guaranteeing not just clinical access, but affordable access, which is the ultimate goal of our profession.
Pharmacist Analogy: The Non-Contracted Emergency Supply
A frantic parent runs into your pharmacy at 8 PM on a Friday. Their child has a severe ear infection, and they have a prescription for an antibiotic suspension. The problem? Their new insurance plan is a closed-network HMO, and your pharmacy is not in their network. The in-network pharmacy, you discover, is closed for the weekend. The child is in pain and needs to start the medication now.
You call the insurer’s after-hours line. You make your case for network inadequacy (“Your network pharmacy is not accessible”) and medical necessity (“Delaying treatment for a pediatric AOM risks complications”). The on-call nurse agrees and gives you a verbal override authorization to fill the prescription.
This is where the SCA negotiation begins. You don’t just hang up. You ask the critical questions:
- The Scope: “Does this authorization cover just this one-time fill, or any subsequent refills as well?”
- The Reimbursement: “Since I am not a contracted pharmacy, what rate will you reimburse me for this prescription? Will you pay my Usual & Customary (U&C) price, or some other calculated rate? I need a guarantee of payment.”
- The Patient’s Cost: “Most importantly, what will the patient’s copay be? I need you to confirm that they will be charged their standard, in-network copay and will not be responsible for the full cost of the medication.”
You are, in essence, negotiating a verbal Single-Case Agreement for one prescription. You are defining the service, the payment rate, and the patient’s financial responsibility. An SCA for a complex medical procedure is the same conversation, just on a much larger and more formal scale. You are ensuring that the verbal “yes” is backed by a concrete, mutually agreed-upon financial arrangement that protects everyone involved.
11.4.2 The Key Players and the Process Flow
Negotiating an SCA is a collaborative effort that involves bridging the gap between two entities that do not have a pre-existing relationship: the insurance company and the out-of-network provider. Your role as the PA specialist is often that of a project manager, facilitator, and translator, ensuring that the right people in each organization are talking to each other and that the patient’s clinical needs remain the central focus of the discussion.
Identifying the Stakeholders
The Payer Team
- The Medical Director/Clinical Reviewer: This is the person who approved the medical necessity of the request. They are your clinical ally.
- The Case Manager: Often a nurse assigned to complex cases. They are your primary point of contact and can help navigate the payer’s internal bureaucracy.
- The Network Manager/Contracting Specialist: This is the key decision-maker for the SCA. They are responsible for provider network development and will negotiate the financial terms. Your case manager will typically connect you with this person.
The Out-of-Network Provider Team
- The Physician/Clinician: They provide the clinical justification but are rarely involved in the financial negotiations.
- The Office Manager/Practice Administrator: Your initial point of contact at the provider’s office. They can direct you to the right person for contracting.
- The Biller/Managed Care Contractor: This is the provider’s financial expert. They will be responsible for negotiating the reimbursement rates and billing codes with the payer’s Network Manager.
Visualizing the SCA Negotiation Workflow
The process can seem daunting, but it follows a logical progression. Your job is to keep the process moving forward from one step to the next, ensuring that communication is clear and proactive.
1
Clinical Approval
UM approves the service as medically necessary based on your justification letter.
2
Initiate SCA Request
You or the Case Manager formally request that the payer’s Network/Contracting department initiate an SCA with the OON provider.
3
Negotiate Terms
The payer’s Network Manager and the provider’s Biller/Contractor negotiate the key terms: scope of service, duration, reimbursement rates, and patient cost-sharing.
5
Care Begins
With a signed agreement in place, the patient can receive care with full financial protection.
4
Finalize & Sign
The payer drafts the SCA document. Both the payer and the provider’s authorized representatives sign the agreement, making it a binding contract.
11.4.3 Deconstructing the SCA: The Essential Terms of the Agreement
A Single-Case Agreement is a legal contract. While you are not a lawyer, you must understand the key components to ensure the agreement is comprehensive and protects your patient. When facilitating the negotiation, your role is to ensure these critical elements are discussed and clearly defined in the final document. You are the quality control expert for the agreement’s terms.
Masterclass Table: Anatomy of a Single-Case Agreement
| Contract Section | What It Defines | PA Specialist’s Negotiation Checklist & Key Questions |
|---|---|---|
| 1. Parties to the Agreement | Identifies the legal names of the payer (e.g., “Blue Cross Blue Shield of Texas”) and the provider (e.g., “The University of Texas MD Anderson Cancer Center”). | |
| 2. Patient Identification | Specifies the exact patient to whom this agreement applies, including their full name, date of birth, and member ID number. | |
| 3. Term of the Agreement | Defines the exact start and end dates for which the agreement is valid. | |
| 4. Scope of Covered Services | This is the clinical heart of the SCA. It lists the specific CPT (procedural) and HCPCS (drug) codes that are covered under this agreement. | |
| 5. Reimbursement Rates | The financial core. It specifies how the provider will be paid. This is the most heavily negotiated section. | |
| 6. Patient Cost-Sharing | This is the most important section for the patient. It explicitly states that the patient will be responsible only for their standard, in-network level of cost-sharing (copay, deductible, coinsurance). | |
| 7. Claims Submission Process | Provides the provider with the specific instructions for how to submit claims under this special agreement, including the mailing address and any required identifiers. |
11.4.4 Reimbursement Strategy: The Language of Financial Negotiation
While you, the PA specialist, will not be the primary negotiator of the financial rates, your credibility and effectiveness are enhanced when you understand the language being spoken. The negotiation between the payer’s Network Manager and the provider’s Biller is a complex dance. The provider wants to be paid as close to their full “chargemaster” rate as possible, while the payer wants to pay a rate that is reasonable and not significantly higher than what they pay their contracted, in-network providers. Understanding the common reimbursement methodologies will allow you to follow the conversation and contribute intelligently if needed.
The Payer’s Goal: Approximate an In-Network Rate
The payer’s fundamental goal in an SCA negotiation is to avoid setting a precedent of paying full price for out-of-network care. They will almost always try to anchor the negotiation to a recognizable benchmark, most often the rates set by the Centers for Medicare & Medicaid Services (CMS). They see the Medicare rate as a fair, externally validated price for a service, and will offer to pay some percentage above that rate to the OON provider.
Common Reimbursement Models in SCAs
1. Percentage of Medicare / CMS Fee Schedule
This is the most common model. The payer offers to reimburse the provider at a specified percentage of the established Medicare rate for the approved CPT codes.
Example: “Payer agrees to reimburse Provider at 140% of the 2025 Medicare Physician Fee Schedule rate for CPT code 99214 in this geographic region.”
Pros: Transparent, predictable, and based on a national standard. Easy for payers to administer.
Cons: Academic medical centers and high-demand specialists may view Medicare rates as too low and will push for a much higher percentage.
2. Percentage of Billed Charges (U&C)
The payer agrees to pay a percentage of the provider’s “Usual, Customary, and Reasonable” (U&C) charges—also known as their full sticker price or chargemaster rate.
Example: “Payer agrees to reimburse Provider at 55% of their total billed charges for the services specified herein.”
Pros: Simple to calculate for the provider.
Cons: Highly unfavorable for payers, as provider chargemasters can be inflated and vary wildly. Payers will rarely agree to this model unless they have no other choice.
3. Per Diem Rate
Used primarily for inpatient hospital stays. The payer agrees to pay a flat, all-inclusive rate for each day the patient is in the hospital, regardless of the specific services rendered on that day.
Example: “Payer agrees to a per diem rate of $3,500 for each day of the inpatient admission.”
Pros: Predictable for both parties.
Cons: The provider risks losing money on very high-cost days (e.g., surgery day), but can make money on lower-cost recovery days.
4. Case Rate / Bundled Payment
A single, lump-sum payment that covers all services related to a specific procedure or course of treatment (e.g., a total knee replacement, a 90-day course of a specialty drug).
Example: “Payer agrees to a total case rate of $45,000 for the patient’s heart valve replacement, inclusive of all physician, facility, and anesthesia fees from admission to discharge.”
Pros: Offers cost certainty for the payer. Simple billing for the provider.
Cons: Requires the provider to accurately predict all costs associated with the episode of care. If complications arise, the provider bears the financial risk.
11.4.5 Troubleshooting the Negotiation: When Talks Stall
Even after medical necessity has been approved, the SCA negotiation can sometimes stall or break down, usually over financial terms. This is a critical moment where the patient’s access is at risk. Your role is to act as a mediator and problem-solver, refocusing the conversation on the patient’s needs and the consequences of failure.
Common Sticking Points and Your Strategic Response
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The Problem: The provider rejects the payer’s rate as “too low.”
Your Strategy: Re-engage your clinical ally (the Medical Director or Case Manager). You must pivot the conversation away from pure finances and back to the clinical reality. Script: “Hello [Case Manager], I understand the contracting team and MD Anderson are at an impasse over the reimbursement rate. I need to stress that we have already established that MD Anderson is the only facility that can provide this medically necessary care. If a financial agreement cannot be reached, the patient will be denied access to the only appropriate treatment for their condition. Can the Medical Director intervene to emphasize the clinical urgency here? A failure to contract is a de facto denial of medically necessary care.”
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The Problem: The payer claims the provider’s demands are “unreasonable.”
Your Strategy: Act as an information broker. Ask the provider’s billing office if they can provide any objective data to support their requested rate. Script: “Hello [Provider’s Biller], I’m working to get this SCA finalized. The payer feels your requested rate is too high. Do you have any data you can share, such as agreements you have with other commercial payers for similar services? Providing a benchmark could help justify your position and move the negotiation forward.”
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The Problem: The process is simply dragging on with no communication.
Your Strategy: Escalate. Use your Case Manager as an internal champion. Set deadlines. Script: “Hello [Case Manager], we have been waiting 15 business days for a draft of the SCA. The patient’s surgery is scheduled in two weeks. We need to have a signed agreement in place by next Friday to proceed. Can you please escalate this with the contracting department and provide a firm timeline for when we can expect the document?”
