While perusing one of the Facebook biller's groups I belong to, I came across this question: "Have any other providers gotten anything from Multiplan? Some people have called it a 'scam'."
Multiplan is many things, including a "rental network" for small insurance companies and third-party administrators, but for the purposes of this article, we're focusing on their "medical bill cost containment" services. Some companies prefer the term "billing intermediaries" but in this articles we'll call them "repricers". Other well-known repricing companies are Three Rivers, Prime, and Genex.
These companies offer their services to any insurer or TPA for any claim, but their focus is on the bills coming in from out-of-network providers. If a provider submits a bill totaling, say, $1,500.00 to a company whose average negotiated in-network fee schedule for the same services is, say $900.00, they are reluctant to pay the entire $1,500.00 or to charge the entire amount to the patient's deductible. They hire the repricer to send out a fax to the provider offering to "settle the claim within ten days" if the provider is willing to accept $900.00 as payment in full for the service. The agreement is ad-hoc, so applies only to the one claim in question.
Is the ad-hoc contract a scam?
In order to analyze the "scam" label, we must first go over the history of the provider network,
HMOs and PPOs formed out of the need by insurers to begin to contain the ever-rising costs of payimg heath care claims. PPOs and network-model HMOs form networks using the "payer-provider" contract. As in all contracts, both parties had considerations and concessions. Most payer-provider contracts grant the insurance company the right to require referrals, precertifications, and many other considerations. The most important cost-containment consideration for the payer is in the form of a "fee schedule" that the provider must agree to, that is almost certainly far below their normal billed amount for all services. The provider gets two main considerations - the right to ownership of all claims, and a guaranteed census (via the "network" which patients are required, or at least enticed, to use).
However, many patients in PPOs still choose to go out-of-network so the payer is still on the line for the bill. Thus, they brought in the repricers to negotiate payment amounts with non-contracted providers.
So is this a "scam"? Of course it's not, because the offer fax from the repricer is very clear in its terms. It's easy to be clear since there is only one or two terms. So why do some providers and their billers throw around the "scam" word so readily? Let's look at this in terms of the differing consideration and concession each type of contract offers the provider:
- Lower Payments
- Referrals May Be Required if Provider is Facility, Ancillary or Specialty
- Precertifications May Be the Responsibility of the Provider
- Ownership of the Claim - Appeal Rights
- Guaranteed Census
- Lower Payments
At this point I think it's easy to see why "scam" is a common, albeit erroneous, way to describe these ad-hoc contracts. Although a few of these contracts do include an additional consideration of a promise to pay the claim within ten days of signing, be aware that most electronic claims are processed within ten days anyway, and furthermore, most states have laws that require claims be processed within 30 days, Be careful about taking what may be a large reduction in exchange for what may be only a few days' quicker payment.
Is it a good idea to sign an ad-hoc contract?
So it's clear that there is no scamming going on with the repricers. But is it a good idea to sign an ad-hoc contract? I advise my clients not to. There is no reason they should accept lower compensation when they are getting nothing in return. The repricers will couch it in terms of "benefit to your patient" even when all or most of the amount is charged to deductible anyway, but the fact that your compensation is lower does not make their total deductible lower - lowering your bill just means they'll have to rack up even more bills to make their deductible. Furthermore, your out-of-network patients are already aware that they have a deductible, yet still choose to go out of network. The pro-active provider would have already warned them of the usual practice of UCR reductions and the wisest provider would have collected payment in full at the time of service. If you are reluctant to collect large bills, up front or after the service, then you should close your practice to out-of-network patients.
In conclusion, although repricing agreements are not a scam, I am reluctant to encourage anyone to sign any.