Follow these steps to avoid pickpocket PPOs
Follow these steps to avoid pickpocket PPOs
Beat the silent PPO’ treatment
(Editor’s note: Although silent PPOs are not new, the practice is picking up steam as managed care organizations merge with traditional indemnity insurers. The following article, which originally ran in the October 1995 issue of our sister publication Physician’s Payment Update, contains advice that still rings true.)
Given that traditional indemnity plans pay top dollar for medical care, it isn’t too surprising that insurers are doing their best to avoid those high payments. Unfortunately, this cost-cutting zeal has resulted in "silent PPOs" taking discounts that you don’t know you’re giving.
This veiled practice is costing physicians and hospitals thousands of dollars as provi ders attempt to adjust to all the new affiliations to which their patients belong, says John McMahan, MD. McMahan is an ear, nose, and throat solo practitioner, and a professor of medicine at the Northwestern University School of Medicine in Chicago.
When McMahan and his business manager began to suspect something unusual about explanations of benefits (EOBs) that cited PPO discounts they hadn’t counted on, they did some research. Michael Hubner, a national practice management consultant and administrator of Northwestern HealthCare Corp., a PHO affiliated with Northwestern Memorial Hospital in Chicago, has worked with McMahan and many other practices to help them avoid silent PPOs.
Here is what physicians and consultants involved with this issue advise a practice to do in order to avoid the silent-PPO treatment:
• Review the terms of each contract to assure that the PPO is not permitted to sell the discount to other plans.
Verify that the PPO is obligated to use financial incentives, directories, and other such materials to steer patients to preferred providers. Be aware that PPO contracts can explicitly or implicitly permit silent PPOs to claim a discount. Technically, PPOs may well be able to take silent discounts, says Robert Gold, JD, attorney for Medical Diagnostic Management, a Hackensack, NJ-based PPO for medical diagnostic equipment. Until any settlement of that legal question surfaces, make sure your contracts specifically prohibit silent PPOs, or any discounts that aren’t specifically agreed to in the contract.
• Audit your files to assure that the discounts you have given are appropriate.
Compare the representation on the payer’s EOB form with the information you received when the patient’s benefits were initially verified. You can also call the payer to verify the terms of the patient’s coverage after you receive an EOB that does not conform to information previously supplied by the patient. "If there is no ID on the card that says it is a PPO plan, don’t accept a discount," Hubner says. It’s critical to copy both sides of patients’ insurance cards upon providing them care, he adds. Do not assume the payer is entitled to every discount it seeks.
• Institute a system in your practice to identify patients who are entitled to a discount, and those who are not, so claims that incorporate an inappropriate discount are flagged.
Many practices are still doing this manually, but computer systems can be programmed to assist in this.
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