You’re a busy practice; you’re presented with a vendor’s standard contract with standard terms and conditions to sign for services to your practice software that submits your insurance claims. Who has time to read all of that information, especially the small, 8-font type?! You sign the vendor’s contract. As part of standard licensing practices, the state audits your practice. The state identifies errors in submitted claims in which the state reimbursed your practice over two hundred thousand dollars. You are required to return the payments or have the money taken from future claim submissions. You learn that the claim submissions were wrong because of errors wholly made by your software vendor. Now you read the vendor’s standard contract terms… You learn that you agreed to warrant that all claim submissions would be reviewed by you in advance of any submissions and that you would indemnify the vendor for any claims related to claim submissions. You are left with options of paying the money and/or appealing the state’s audit – both costly. Even if you could pursue reimbursement from the vendor, the contract includes a limitation of liability, limiting any recovery by you in a claim against the vendor to the amount of fees you paid on the contract in the last 12 months.
Significant financial impact
Read contracts in advance of signing them and/or have your attorney review the contracts in advance. Your attorney can also help to negotiate terms that are more favorable to you. Standard vendor contracts are often written in favor of the vendor. If you do not read them or negotiate other terms, you may have no recourse like the situation above. Remember, you have negotiating power. Again, your attorney can help with that process; it does not need to take up your time. While contracting seems like a mundane task, the terms can become very important. Some important contract provisions include indemnification, warranties and representations, contract termination, and limitations of liability. You need to address these types of issues before any vendor relation issues arise.
ABOUT MAGGIE DICOSTANZO
firstname.lastname@example.org | 717.980.3142
Maggie DiCostanzo is a principal attorney in Offit Kurman’s Healthcare practice group. For nearly 20 years she has focused her legal practice by representing physicians, hospitals, post-acute care facilities, and other healthcare professionals, delivering health law advice and counseling as well as representation in regulatory, general liability, and professional liability matters. She is also a registered patent attorney with the U.S. Patent & Trademark Office, and drafts licensing agreements and other intellectual property-related documents. Ms. DiCostanzo also assists lawyers in Offit Kurman’s other practice groups, including Business Law and Transactions, to address discreet healthcare issues.
ABOUT OFFIT KURMAN
Offit Kurman, one of the fastest-growing, full-service law firms in the United States, serves dynamic businesses, individuals and families. With 18 offices and more than 250 lawyers who counsel clients across more than 30 areas of practice, Offit Kurman helps maximize and protect business value and personal wealth by providing innovative and entrepreneurial counsel that focuses on clients’ business objectives, interests and goals. The firm is distinguished by the quality, breadth and global reach of its legal services and a unique operational structure that encourages a culture of collaboration. For more information, visit www.offitkurman.com.
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