The Roadmap to Predictable Reimbursements

The Roadmap to Predictable Reimbursements

By Azadeh Farahmand

Are you a non-network provider? If the answer is yes, read on. We may be seeing the beginnings of a new trend in healthcare reimbursement as providers continue to search for ways to avoid the unpredictable and often egregiously low reimbursement rates they receive on out-of-network (OON) claims. Unless a mutually agreed upon claim settlement agreement has been negotiated with the provider in advance of payment, the provider is exposed to the insurance company’s predetermined cost containment methodology and rates. This may include a contracted deal with a national wrap network or the results of a third-party OON vendor selected by the payer to provide coverage or fee negotiation services in which the payer organization participates in some shared savings revenue. In either case, the provider is stuck with the reimbursement they receive unless they want to dispute or protest the reimbursement. Disputing reimbursement issues takes a lot of time and money, and often the provider grudgingly agrees to the reimbursement allowed, leaving substantial revenue on the table. But the question remains, was the transaction legitimate?

For some time, companies have looked at ways to provide contract management for providers as a way of measuring the overpaid or underpaid claims based on their arrangement. To add to this complex dilemma, most practice management systems are not equipped to support and manage PPO contracted rates, terms, and conditions. So, again the provider is left guessing, vulnerable and open to very loosely defined rules and regulations. Often, they are just happy to receive a check even though they know it has potential problems.

This problem persists even though some 15 states have passed legislation protecting the provider from being forced into making these settlements with payers. This occurs even when the discount applied to the claim is suspect of being taken from a network that may or may not be a legitimate discount for that particular claim based on contracting language and its legitimate use (paid access). More states are considering passing similar legislation, but what about right now? The growing OON claims volume and dollars settled on a contingency basis are substantial and often the provider is squeezed the hardest.

A Cost-Containment Solution

The good news is that there is a way for the provider to fight back. Once again, technology and information resources will be at the center of the solution. Since more and more providers outsource to sophisticated third-party billing or revenue cycle management organizations, outbound claims data can be moved about on a pre-adjudication basis to multiple vendors prior to arrival at the payer organization for adjudication to obtain critical pre-adjudication information.

This capability brings about a significant opportunity for providers to access PPO networks or available databases housing network contracting data to determine within reason what the reimbursement expectation should be. It also gives them the ability to settle with the patient at the point of service for the anticipated difference or balance of the bill for patient responsibility at the point-of-service. With this data collected and submitted to the payer electronically along with the original claim, it places the payer on notice that the provider has made an agreement with it a predetermination about the approximate value of the claim in a fair market cost containment arrangement.

Since the payer will most likely have an existing contract with a national wrap network and fee negotiation vendor, they could potentially push back on the charges and discount allowed by the network. However, since the patient and the medical facility already are aware that the encounter is an OON situation, the provider is back in control of its revenue and this gives them say in what is and what is not acceptable in the settlement process of OON claims.

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