Managed Care Contract Leasing – Is Your Practice Suffering?

Do you expect your claims to be paid at R&C (reasonable & customary) instead of insultingly low insurance carrier fee schedules?

Have you been scrutinizing your EOBs for your out of network patients?

You may be surprised at what you find!!

Although many providers participate with Managed Care Contract, just as many providers choose to remain out of the network, unwilling to accept the low reimbursement rates associated with being a ‘par provider’. By choosing to stay ‘out of network’ with carriers such as Aetna, UHC, Cigna, and Oxford, providers expect to be paid at the R&C rate of the geographic area.

Over the last two years, we started noticing that reimbursements were being reduced by these carriers (for certain policies)even for out of network providers. In some cases the EOBs clearly mentioned a network contract (other than the insurance carrier—such as Multiplan), but other EOBs had not specified a network at all.

To understand what is happening today, we must go back a few years. Many providers joined insurance carrier networks and Managed Care Networks (there is a difference), rationalizing they would accept a lower reimbursement but would see an increase in patient volume. This may be the case with direct participation with an insurance carrier (i.e., Aetna), but looking back now, providers report it is not the case with participation in Managed Care Networks such as Multiplan.

Unfortunately, today Managed Care Networks (such as Multiplan) and others may be ‘leasing’ your contracts to insurance carriers – but not for the purpose you may have originally intended. This type of leasing does not seem to increase patient volume, and as a matter of fact, it usually does not even give you the benefit of being in-network (pt still has a deductible & coinsurance instead of a copays, etc). To make matters worse, you may not even have a contract with Multiplan as they may have leased from some other network you joined years ago! So—where is the benefit to the provider? That is the question!.

Is this happening to you? This is an example of what happened to one provider who did not even know it was happening:

Dr. Smith chose to remain out of network with the major carriers, however, some years ago (when the concept of Managed Care  Contract was being introduced) he signed a contract with MOP Network (Phony Name). There was no evidence of increased patient volume nor has the doctor had dealings with MOP and after time forgets he even has the contract. However, in 2004 MOP network leased all their contracts to RDS Network (Phony Name) who then leased everything to DEF Network (Phony Name), who has now leased to Multiplan (NOT a phony network) who has now contracted with many of the major carriers.

Now, not only are Dr. Smith’s claims being paid at the Multiplan reduced reimbursement rate, but because there is no contract with the major carrier, the deductible and coinsurance still applies as he is still considered out of network. He is not seeing increased patient volume from these leases, all he is seeing is reduced reimbursement.

We have seen this and similar scenarios happening to numerous providers. In this scenario, we had to help Dr. Smith track down the original contract (we went through 5 networks to do that—none of which he or we had ever even heard of) but found it stemmed from a contract he signed in 1998. To make matters worse, we sent all 5 companies letters requesting removal from all networks. We thought we were officially out of every contract and there would be no further reductions.

However, then found he was back in-network with Multiplan one month later because Multiplan then contracted/leased with Triad (which he participated with). At that point, as a provider contracted with Triad, he was now again subject to Multiplan reductions. Any provider contracted with Triad may want to contact them to find out if this participation ties them to networks such as Multiplan.

For providers that are having the same thing occur, find out which contracts are causing the problem. Then evaluate—what are you getting from this contract? Are you seeing increased patient volume (unless it is a one on one contact with an insurance carrier, probably not)? Are the number of HMO/EPO etc. patients you are seeing (that have no out of network coverage) such a volume that they compensate for the amount you are losing per day from the patients that have well paying out of network benefits? Please contact us with any questions at (973)827-3544.

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