Let's Help Each Other

Physical therapy is changing rapidly. As a PT with more than thirty years of experience, the changes observed in the last ten years triple those of the first twenty years. The pace of change is not slowing down. The Medigraph Blog will serve as a forum that will enable us to exchange ideas and assist each other. This blog will be used to share billing, documentation, and any other ideas to improve any aspects of our profession. If we share what we have learned, we can develop a resource that enables our collective understanding to advance our careers.

As profit margins grow smaller and expenses grow larger, we need to assist each other to survive and prosper. If we share our experiences we can help each other to grow professionally, administratively, and financially. Our professional lives, our livelihood, and our personal lives are intertwined. Our resources individually are limited. Together we can accomplish more than we can individually. Let's help each other

Regards,

Tom Kane, PT
MediGraph Software

Out of Network Reimbursement
6/16/2011 6:58:00 PM

Out of network problems are probably costing you money.   Therefore, many physical therapists choose to become in network providers.  The benefits of being an in network provider include;

  1. The opportunity of increased referrals
  2. Claims are processed more quickly, assisting with your cashflow.
  3. The payment for services goes directly to you, bypassing the patient.
  4. Claim denials are reduced.

As good as this arrangement may appear, the biggest caveat is that in-network providers are reimbursed less for services rendered.

Some physical therapists are deciding that out of network is preferred due to the reduction of in-network payment amounts.   It is important to recognize the consequences of this action.  As an out of network provider, sometimes reimbursements are generally higher than an in-network provider.  However, there are negative outcomes associated with out of network providers that can be adressed with preparation.    

Many insurance companies ignore the ‘Assignment of Benefits form with out of network providers (an AOB form is signed by the patient and authorizes the insurance provider to pay you directly).   Simply stated, when a patient assigns their benefits to the practice, the payment   (checks) are sent to the practice and not to the insured (patient).   But, because the insurers’ relationships are with the patient and not with the therapist, insurance companies regularly ignore the AOB, sending the checks directly to the patient.

An investigation by the New York Attorney general into out of network reimbursement was published in 2009.  The document is available at: http://www.scribd.com/doc/16807960/Health-Care-Report-The-Consumer-Reimbursement-System-is-Code-Blue .  The report concluded, “Our investigation has shown that the conflicts of interest inherent in the current system have a real impact on working families in New York. Analysis discloses that for ordinarydoctor’s office visits, the Ingenix databases understate market rate by up to 28 percent across the  oard. This translates to at least hundreds of millions of dollars in losses for consumers over the past ten years across the country.”  An additional investigation by U.S Senator John Rockefeller that found these same flaws in the out of network reimbursement systems is available at: http://www.omhc.com/download/Ingenix_Congressional_Report.pdf. In January 2009, The AMA settled a suit against United Health Care for $350 million for ‘allegedly’ under-reimbursing consumers nationwide. 

What does all this mean?  It means that we therapists can obtain increased reimbursements for out of network claims if we appeal these unreasonable reductions.  When an unreasonable reduction occurs, and the EOB is received, a written appeal should follow.  The letter should contain should include the following legal precedents:

  1. The former New York Attorney General's investigation and settlements (cite the Code Blue Report).
  2. Sen. Rockefellers investigation and report findings.
  3. The UHC AMA settlement.
  4. The various class actions that have emerged since the UHC AMA settlement.

The intention here is to establish that out of network claims are being under-reimbursed and that an increase in payment is warranted.  Though appealing a paid claim may seem unusual, reduced payments are not unusual.  These lost revenues will never be acquired with a passive attitude, therefore you should consider the following:

  1. Have a standard letter that you can use whenever you suspect reduced reimbursement for out of network patients. Do not reinvent the wheel every time or you motivation to request additional payment will dwindle. 
  2. Present proof of out of network reimbursements that were reasonable from other providers (and sometimes from the same insurer), demonstrating that you were under-reimbursed.
  3. Maintain a paper trail of the opportunities that you gave the insurance company to behave in a reasonable manner.  These documents may be needed in small claims court.
  4. Utilize small claims courts if your appeal is denied.  By using small claims court, we therapist establish a precedent that will positively influence current and future claims sunmitted to that company.  You will be taken seriously in future dealings.  Those adjusters and companies that do not want the inconvenience of attending small claims court will think twice before reducing your next claim submission. 

Another usefull action to consider with out of network reimbursement issues is to present educational materials to the patient.  Inform the patient you are an out of network provider and that the checks will be sent to the patient.  Instruct the patient to mail the check in the stamped self addressed envelope that you provide to the patient (make it easy for the patient to comply).  Provide the patient with the name of a billing staff person that can answer any questions.  Advise your patient not to be alarmed by the large patient responsibility statements that are outlined on the EOB.  Inform the patient that you will appeal the claim.

Health care profit margins are not growing.  It is important that we receive the reimbursement that is due to us.  Establish a procedure that facilitates this task.  Every dollar that is recouped directly augments your cash flow, and hopefully, your bottom line.

Be well,

Tom Kane, PT
MediGraph Software