A Managed care organization (MCO) is an organization that deals with the holistic application of health care and takes roles such as; being a health insurance and also the treatment of its members. Members of MCOs are required to pay a monthly fee to receive medical services in case of an emergency.
In a managed care setting the basic elements of a contract initially come as an offer and then later acceptance which constitutes a bargain. The contract involves two consenting parties whereby an MCO represented by their lawyer has something that an individual seeking comprehensive medical service would like to have. If there is an agreement by both parties either in words or writing, then an acceptance of the contract is arrived at with the exchange of promises and appending of signatures on the document. Finally, a valid contract must contain sufficient consideration or an item of value that is being given in exchange for the offer and this case is the medical services a member receives from an MCO. Compensation can be awarded in monetary value by a court of law in case the contract becomes invalid and the receiver of the medical services decides to sue for compensation.
Negotiations involve a series of steps that must be followed accordingly for both the offering and accepting parties to arrive at a consensus. The initial step in the negotiations is orientation and research, where a party planning to take up membership at a Managed care organization will approach them to understand the benefits they offer. The second stage is the resistance stage, where the customer will demand price adjustments and additional benefits from the MCO. The third stage brings about the amending of tactics as both parties try out different packages offered relative to the financial capacity of the customer. Solid bargaining ensues in the fourth stage as both parties try to come up with amicable decisions such as price adjustments, financing options, or additional benefits. The fifth and last stage involves the ratification of the agreement which has been arrived at after the bargaining process.
If a contract contains provisions for performing illegal activities, then the contract must be declared void for it cannot stand in a court of law. If an MCO offers medical services under an illegal contract, that MCO may not have the power to sue in order for it to recover the value of the services offered under the faulty contract. Once a contract is declared void any agreement stipulated in the contract ceases to exist and the MCO together with the members are no longer bound by the contract. It is therefore imperative that both the MCO and the members to understand the full implication of a contract before they append to it.
Another section of a contract is the severability clause; this is a section of a contract that controls the applicability of the remaining sections of any contract when some clauses of a contract are declared infeasible by a court of law. The major role of the severability clause is to maintain the functionality of the contract in case the contract contains provisions that are unenforceable. Faulty provisions in a contract binding members of an MCO with the organization will in most cases make a contract void; hence the severability clause is used to protect the entire contract against failure. This means that as long as the contract contains enforceable provisions it will still bind members and the MCO based on the remaining provisions rather than have the entire contract declared void.