Quarterly Compliance Article – Contract Considerations

Community Health Centers provide a wide range of services which define their scope. The Scope of Services is most commonly referred to in the health center world as the “Form 5A”. A sample Form 5A can be found HERE . The “Form 5A” provides a list of required services (services a health center MUST provide) and a list of additional services (services that are optional). This form also describes the mode of service provided; in other words, HOW the service will be provided. Will the service be provided by the health center (Direct: W-2 or National Health Service Corp employees), through a formal written contract agreement (also known as Column II, which the Health Center pays for), or through a formal written referral arrangement (also known as Column III, which the Health Center doesn’t pay for)?  

Determining which method by which to provide a service is up to the health center; taking into consideration patient needs through patient surveys and focus groups, financial viability or stability, and discussion with key management staff and board members. 

In developing a contract or formal written arrangement, known as a Memorandum of Understanding or Agreement (MOU/MOA), it is important to seek legal counsel to determine non-profit requirements, state and local laws, and other contractual obligations required in contracts and MOUs/MOAs. 

This article only addresses the requirements set forth by HRSA to determine required language for Column II and Column III obligations. Let’s consider Column II Contracts. 

Column II Contracts

Column II contracts are formal written contracts or agreements where the community health center will pay for the service. Based on the Health Center Program Site Visit Protocol, Column II & Column III contracts are reviewed in Chapter 4 (Required and Additional Health Services) , Chapter 5 (Clinical Staffing), Chapter 9 (Sliding Fee Discount Program) and Chapter 12 (Contracts and Subawards). The following questions/comments should be addressed and included in Column II contracts:

  • Does the contract describe how the service will be documented in the health center’s patient record?
  • Does the contract describe how the health center will pay for the services?
  • Are there provisions in the contracts or through other means that contracted providers verify provider licensure, certification, or registration through a credentialing process?
  • Are there provisions in the contracts or through other means that contracted providers verify that providers are competent and fit to perform the service through a privileging process?
  • Does the contract ensure that full discounts are provided to patients below 100% of the Federal Poverty Guidelines (FPG), partial discounts for FPG between 100-200% (with at least 3 classes), and no discounts over 200% FPG? (this is also known as Sliding Fee Discount Language)
  • Does the contract describe specific activities or services to be performed or goods to be provided? 
  • Does the contract have mechanisms for the health center to monitor contractor performance?
  • Does the contract contain provisions that address data reporting expectations, and intervals for reporting?
  • Does the contract have provisions addressing record retention and access, audit and property management?

The provisions listed above must be addressed in Column II contracts. A community health center is given the ability to choose how and what language to add in order to demonstrate compliance with these requirements within the contract. 

Column III Agreements

Column III agreements are usually reflected within MOUs/MOAs. These agreements are considered to be a formal written referral arrangement. The following questions/comments should be addressed within the MOU/MOA:

  • Does the agreement describe the process for making, tracking, and managing referrals for services to the referral provider?
  • Are there provisions in the agreement or through other means that contracted providers verify provider licensure, certification, or registration through a credentialing process?
  • Are there provisions in the agreement or through other means that contracted providers verify that providers are competent and fit to perform the service through a privileging process?
  • Does the agreement ensure that full discounts are provided to patients below 100% of the Federal Poverty Guidelines (FPG), partial discounts for FPG between 100-200% (with at least 3 classes) and no discounts over 200% FPG? If the referral provider has a Sliding Fee Discount, is it greater than or better than what the Health Center can offer? (this is also known as Sliding Fee Discount Language)

Other Considerations

Development of contracts and agreements should address other language such as, but not limited to termination, confidentiality, terms of agreement, indemnification, and so on. It is important that Health Centers check with local legal counsel, non-profit state laws, and any other regulatory requirements in the development of these types of contracts/agreements. 

 

For more information, please visit: https://bphc.hrsa.gov/sites/default/files/bphc/programrequirements/scope/form-5a-self-assessment-review.pdf 

https://aspe.hhs.gov/basic-report/guide-memorandum-understanding-negotiation-and-development 

https://www.hrsa.gov/sites/default/files/hrsa/grants/manage/technicalassistance/grant-funds-are-you-following-guidelines.pdf 

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