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Practice Management Alert

Beat the Silent Reimbursement Foe

Published on Sun Sep 01, 2002

Can you keep track of which payers you participate with? Some repricing companies are betting you can't and are cutting down on what they pay without giving you anything in return.

Unless you learn how to unmask these impostors, your office could be letting good money slip right through its A/R.

This scheme, dubbed the silent PPO, occurs when a payer has accessed your contract discount information and applied it to a claim for a patient who was not referred to your office as part of a PPO network. However, sometimes a payer can legitimately access a discount by joining an umbrella network. It takes some legwork to learn whether you're being scammed or if someone is using the network legitimately.

If It Looks Like a Silent PPO

To learn whether you're losing out on money you deserve, experts say, you must watch for these red flags when they're posting EOBs:

  • An EOB from a repricing company that states, "PPO discount applied" but doesn't name a specific PPO; or
  • An EOB with a discount, but from a payer you don't participate with.

    If you post an EOB that lists a reduced payment, you should make sure the payer is a company you participate with. Jennifer Bever, MS, CHE, a consultant with Karen Zupko and Associates Inc., a practice management consulting and training firm in Chicago, counsels practices to use a contract summary grid containing all the pertinent information about your practice's current contracts. The grid is a primary resource for checking to make sure discounts are legitimate, she says.

    You may also want to use your practice management system to keep track of discounts for you. Some systems have a built-in feature to track contracts and alert you when a nonparticipating payer discounts a claim, but others do not, says Barbara Cobuzzi, MBA, CPC, CPC-H, CHBME, president of Cash Flow Solutions Inc., in Lakewood, N.J. If your system doesn't have that feature, you can design some way to keep track of that information, she notes. In the past, Cobuzzi used two codes for each insurance company one that was alphanumeric to denote participating and one that was just numeric to denote nonparticipating.

    Whether you track current contracts electronically or with a paper chart, you should be able to identify quickly whether the payer deserves a discount.

    When you discover a discounted payment from a nonparticipating provider, it's time to become a detective. The following steps will help you learn what's happening and help you fight off scams.

    1. When you find a suspicious EOB, put the check in a drawer and don't cash it, says Gil Weber, MBA, a practice management consultant in Davie, Fla. If you cash the check, "you may have limited or precluded any opportunity for full recovery," he explains.

    2. Then, call the payer. Ask the payer which network discount is being used, Bever urges. If they can't name it, that's a problem, she says. If they can name it, ask to see the contract, Cobuzzi says. Next, Cobuzzi recommends you call the network to verify the contract.

    If there is a valid contract between the payer and a network you participate with, you should look more closely at your participating contract. Does the network have the right to sell your discounts to payers without notifying you? If so, you may find that the contract needs renegotiation or that you no longer wish to participate with the network. Without proper contract definitions and termination provisions, a network may be able to sell your discount to every payer in town.

    3. If the payer can't produce a contract that enables it to discount your services, then you can demand full payment. The company may relent after your first inquiry, or you may have to work hard to get the money you deserve.

    How you go about claiming full payment depends on the culture of your practice. Bever recommends requesting full payment on the phone when the payer can't name or prove its right to a discount. Weber recommends you consult your lawyer and work with him or her to request payment if the amount of the balance is enough to justify a fight.

    4. If a phone call doesn't get you the full payment, you can take a variety of steps up to and including legal action. Cobuzzi advocates balance-billing the patient. "In this situation, it's up to the patient because you have no relationship or contractual relationship with the insurance company," Cobuzzi say. The insurance company hasn't "broken any promises to you." Therefore, the patient who does have a contract with the insurance company has to pressure the company into paying, she says.

    "Balance-billing can be a double-edged sword," Weber says. You should carefully weigh the risks of alienating a patient, he cautions.

    Cobuzzi acknowledges this problem, and for doctors who do not like to balance-bill, she says billers can call patients and tell them about the situation. "Let them know you're not going to send them to collection," she advises, but get them to lean on the insurance company.

    Bever counsels her clients to continue pursuing payment directly from the insurance company. Send a letter demanding payment in full and carbon copy the state insurance commissioner on the letter. Depending on how active your state's insurance department is, you may get some help from the commissioner.

    "We've also had folks have very good luck if they used their state medical society or state specialty society," Bever says.

    Eventually you could find your practice involved in a court battle if the payer continues to refuse and the claims continue to pile up.

    Being vigilant and pursuing silent PPOs can bring substantial reimbursement, experts agree.

    Note: Bever finds that orthopedic, neurosurgery and hand surgery practices are the most frequent targets of silent PPOs. $ $ $

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