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What is a silent PPO? & 9 other FAQ's about out-of-network reimbursements

As payers continue to alter reimbursement models for out-of-network care, providers must meet this uncertainty with diligent payer negotiations to ensure maximum repayment.

Collect Rx has been helping providers earn higher reimbursements on out-of-network bills for 10-plus years. Its team of experts hail primarily from payer organizations and understand how to negotiate higher rates to maximize providers' reimbursement on out-of-network bills. With 800-plus customers, Collect Rx processes more than $1 billion in out-of-network claims each year.

In an April 3 webinar sponsored by Collect Rx and hosted by Becker's ASC Review, John Bartos, CEO at Collect Rx, and Richa Singh, executive vice president at Collect Rx, answered providers' most frequently asked questions on out-of-network reimbursement negotiation, payment processing and policies to help providers avoid potential bad debt and earn top dollars for the care they provide. This presentation served as a follow-up to a Nov. 15, 2017, Collect Rx webinar.

Here are 10 questions addressed in the webinar.

1. How is an out-of-network bill processed?

First, an organization provides service to a patient who is out-of-network, meaning the provider has not negotiated a contracted rate for reimbursements with that patient's payer. After receiving the bill, the payer turns it over to one of their vendors — a third party employed by the payer that reduces payments through bill minimization tactics. The vendor will evaluate data on the bill, such as the amount billed, services rendered and most importantly employer preference. The vendor then decides to either pay less than the charge amount, deny the claim or negotiate with the provider prior to payment.

 2. Out-of-network in my state has gotten more challenging. Why?

"There is a common misconception out there about out-of-network," Ms. Singh said, explaining that reimbursement rates are not determined at the state level. Employer groups actually dictate reimbursements.

 3. Is there a billing claims data source providers can use that is not biased as to who collected the data?

Collect Rx recommends providers gather their own data to use as evidence during negotiations. This may mean more work and could be more time consuming, but this way, providers can prove that the payer's reimbursement is inadequate and it's more difficult for payers to refute the provider's own data.

4. Sometimes we are told that the policy pays only up to 110 percent of Medicare. Can that be right?

Yes. This is what is referred to as a limited benefit policy, or a policy that puts restrictions on the calculations of out-of-network reimbursements.

5. Can payers legally have no out-of-network benefits in their policy?

Yes, but it depends on the state. There are two reasons why insurers would want to exclude out-of-network benefits, according to Mr. Bartos. One is to keep premiums lower, and another is to incentivize patients to only see providers in their network.

"The vast majority of employers and employees do want out-of-network benefits, they want access to their providers, they want the doctor they want, they want the hospital they want," Mr. Bartos added." Basically they want to control their care."

6. Why might a single case rate agreement not be honored?

These agreements are not binding; the payers are not required to follow them. They may not be honored because "All agreements are subject to patient benefits, and they are only run through the benefits after the settlement proposal is signed," Ms. Singh said. "If there is any patient responsibility — meaning deductible or coinsurance — your payments by the payer will be reduced by that amount.".

7. We sign negotiated settlements, but the payer still applies patient responsibility so I end up receiving less. Why is that?

The negotiated amount signed on those agreements is the allowable amount, not the payments providers will receive directly from the payer, which means patient responsibility still applies. For example, if an agreement has a $10,000 allowable, and the patient deductible is $3,000, the payment received from the payer will be $7,000. Patient responsibility is nonnegotiable; it is dictated by the contract between the employer group and the payer.

8. What is a web portal?

These are set up by several vendors to automatically send single case rate agreements. Instead of the vendor processing these agreements by hand, it is computerized, making it harder for providers to negotiate. "Avoid the portal to maximize your reimbursement," Mr. Bartos said.  

9. Why bother appealing underpayments, and what should be done when the first appeal is denied?

Patient collections are difficult for providers. When patients are unable to pay their bills, appealing underpayments serves to help providers receive the payments they deserve by seeking greater reimbursement from the payer. If the first appeal is denied, check with the payer to see if the policy allows for additional appeal. Only after other avenues of review have been exhausted should claims be taken to other agencies or peer-to-peer review.

10. What is a Silent Preferred Provider Organization — or third-party rental agreement — and how does it different from a global agreement?

A Silent PPO is a payer tactic to lower reimbursements by accessing the discounted rates of another insurer, generally without the provider's knowledge, explained Mr. Bartos. "Think of these third parties as middlemen. They bring together payers and providers to participate in contracts, [and] they are often not favorable from a provider perspective," he added.

Similar to a Silent PPO, global agreements are a cost containment tactic to lock organizations into lower reimbursement. However, third party rental agreements are often more long term, while global agreements can be executed just by checking a box.

To gain insight into nearly 30 FAQs on out-of-network strategy, listen to the webinar here.

To learn more about Collect Rx, click here.

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