Wiki Contracting and fee review

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I have a provider that I believe is getting paid less than Medicare rates from his commercial payers and am needing to do a large review. Is there someone with experience doing this that can help guide me>
 
1) Yes, there are commercial payors who may have a fee schedule less than Medicare rates.
2) There may not be much you can do about it on your own, other than no longer accept that insurance.
3) If you are not already part of an IPA/PHO, look into that option.

Provider likely signed contracts with standard fee schedules. From my experience, as an individual practice it is very difficult (perhaps impossible) to negotiate your fee schedule if there are any other physicians anywhere near you. So, unless you are the only doc providing a specific service in 200 miles, it is not worth the futile effort to negotiate your fee schedule.

Over the years, I have tried to negotiate our fee schedule with almost every carrier, on multiple occasions. Unfortunately, I was successful only twice.
Basically, if you are a small private practice and represent only 1 or even a handful of providers, the insurance company just did not seem willing to bother. Their attitude was "Here is our fee schedule. If you don't like it, don't be participating." If you are a private practice, my recommendation would be to join a strong IPA/PHO in your area. IPAs are groups of independent practices that have negotiating power with payors and with suppliers. The insurance companies are much more likely to listen when the IPA/PHO threatens to withdraw hundreds or thousands of providers if they can't get a better fee schedule. That is exactly the same situation for large healthcare organizations.

I thought as a subspecialist with only 3 doctors of the specialty in a county of almost 1.5 million people, I could get someone to listen. I was mistaken. I tried a couple of different types of proposals - across the board percentage increase over standard, payment as a percent of our billed amount, payment as a percent of Medicare, or even a carve out schedule where at least our most common codes could get better reimbursement. We even tried an expensive consultant who couldn't get anyone to budge. The 2 times I was successful, one was for payment as a percent of our billed amount (after I already terminated the contract), and the other was to pay a flat additional fee for certain services. We decided to withdraw from the 5 lowest paying carriers. We decided it was a better decision to not have those additional patients than to potentially compromise care.

The best business decision for us was to join an IPA, which meant a 30-40% increase for our largest commercial carrier. It was well worth the fee and having to meet certain metrics. Depending on the IPA, you still retain almost all of the freedom of being an independent practice. Contact your local IPAs and read through the contracts. While they are typically prohibited from disclosing the exact fee schedules to non-members, you can usually find out which payors they have negotiated with. And the IPA contract should also specify what metrics/information you need to supply.

Eventually, we were incorporated into a large healthcare system. The healthcare system has a significantly increased fee schedule for all carriers. When I saw what the insurances are willing to pay when you have negotiating power, it made me very frustrated that no one would listen when I wanted even a small increase.

Good luck!
 
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