Practice Management Alert

Save money and hassle by refusing tricky discount offers

Promises of prompt carrier payment may not always be a good thing. If you accept additional carrier discounts just so you can collect reimbursement faster, you could obligate your practice to future discount arrangements.
 
It happens all the time: A carrier rep or third-party administrator rep calls to offer immediate payment on one of your claims. In return, they ask for an additional discount to the payment you deserve. "This type of agreement only benefits the payer," says Karen Deardurff, insurance specialist with Otorhinolaryngology Inc. in South Bend, Ind. "Normally, if the practice isn't paying attention, they will lose money in the transaction," adds Deardurff, who has an insider's understanding of these agreements from 13 years working on the carrier side of claim processing and payment.

What to do: Read the real-life scenario below, and the expert advice that follows it, to ensure you know why and how to avoid unfair carrier agreements.

And the Experts Say ...

In most cases, you're better off just saying no. "We have received the same requests to negotiate a discount for speedier payment," says Susan Billock, customer service manager at Certified Emergency Medicine Specialists PC in Grand Rapids, Mich. "We tell them no way, and we want payment in 10 days or interest will be applied to the claim per the Clean Claims Act and/or Prompt Payment Act -- if they apply."

3 Reasons to Be Careful

1. Your claim is clean. The payer tells you it can pay the claim immediately if you accept the discount. This indicates that your claim is clean -- otherwise the payer would have denied it. "Believe me, this offer won't be made on a claim that isn't clean," Deardurff says.

"You should not have to accept an additional discount in order to get a timely payment, especially since you already have a contract with the insurance company and already take a discount," Billock says. Carriers are supposed to process clean claims within 30 days, although the number can vary by state. When a carrier or third-party administrator calls and asks you for a discount, they are betting on the possibility that you won't hold them accountable to their prompt-payment obligations.

Take action: In addition to refusing the additional discount, be sure to demand the timely payment of the full amount you deserve. If applicable, refer to legislation such as the Clean Claims Act and Prompt Payment Act to bolster your case and convince carriers to pay up. Every state should have its own Web site on such legislation, but you can check out Mich- igan's as an example: http://www.michigan.gov/cis/0,1607,7-154-10555_13648-56058--,00.html. If discount requests and untimely payments become a repeat problem, report the carrier to your state insurance commissioner.

2. Payers may not deliver the promised amount. If you read a proposed discount agreement's fine print, chances are the payer is promising "to consider, not pay, the discounted amount," Deardurff says. "The discounted amount is still subject to all deductibles, co-insurances and plan limitations." If you have time, call your carrier's customer service "to ask if the deductible has been met and find out at what percentage this particular service should be paid." Most times, your practice will save money by turning down the offer.

3. Fine print may obligate future discounts. A discount agreement's fine print may hide any number of unfavorable terms. "With several carriers that continually try to negotiate with us, [we have found that] by our accepting one agreement, we in turn agree to this type of arrangement on all future claims," Deardurff says. Of course, "this was in very fine print on the bottom of the fax." Be sure to read the fine print and avoid entanglement in future obligations.