2016 - Senate Committee Passes Fair Contracting Legislation

Fair Contracting 
(Sen. Ralph Alvarado, MD) 

Under Senate Bill 18, physician contracting with insurers will become fairer and more transparent in Kentucky. Senate Bill 18 changes current law and requires insurers to follow a new set of procedures before changing an existing agreement with a provider. Specifically, the measure requires:

  • ninety (90) days’ notice for a material change;
  • notices for material changes dealing with membership networks or new/modified insurance products to be sent by certified mail;
  • notices for all other material changes to be sent in an orange-colored envelope;
  • notices that describe the material changes;
  • an opportunity for providers to use “real-time communication” to discuss the proposed changes with the insurer;
  • a clean, consolidated informational copy of the agreement after three (3) material changes in a twelve (12) month period; and
  • an opportunity for providers to object to proposed material changes by utilizing specifically defined procedures.

GLMS Managed Care Toolkit




KMA Resources

Contracts-Illegal Provisions

The Kentucky General Assembly has passed legislation outlawing various contract provisions in contracts between managed care companies and physicians. This section discusses these laws and provides examples of the contract provisions prohibited by such laws. Portions of the following section were taken from the American Medical Association’s Model Managed Care Contract.


Contracts - Model Managed Care Contract

This section is taken from a document prepared by the Private Sector Advocacy Division of the American Medical Association. It is designed to educate physicians and provide a reasonable alternative to one-sided third party payer contracts. Model contract provisions, along with an explanation of those provisions, are included in this section (the explanation is in the bold language). Physicians may want to compare the language set out in this section with the actual contract language contained in their contracts for an explanation of the language in question as well as an understanding of how the provision might affect their practices. Throughout this section, the phrase "Medical Services Entity" stands for the physician entity (eg individual, corporation, group practice, network), while the phrase "Qualified Physician" refers to an individual physician within the entity. The annotations refer more informally to "physician" or "physician group/network." Where the contract is with an unincorporated individual physician, that physician is both a Medical Services Entity and a Qualified Physician. This model agreement is not intended for use between a physician group or network and an individual physician.


Contracts - Required Filing

An insurer must file with the Department of Insurance sample copies of any agreements it enters into with medical providers [304.17A-527(1)]. An insurer that offers a health benefit plan that enters into any risk-sharing arrangement or subcontract agreement must file a copy of the arrangement with the Department of Insurance. 


Contracts – Required Provisions

All agreements between providers and managed care plans must include certain provisions.


AMA Resources

Available to AMA members and their practice staff, you can use this tool to: (1) negotiate more favorable contract terms by using alternative contract language based on existing state laws; (2) look up managed care laws in your state and make sure that contracts comply with them before you sign; (3) find existing state laws to help support your claim appeal letters or file complaints against non-compliant health insurers; and (4) read guidance on often-problematic managed care contracting issues and find related AMA policy. The National Managed Care Contract database can even help you prepare for establishing practice in another state. Visit  to access this tool and learn how it can help you in your practice.