Silent PPOs and Rental Networks
Most group practices are losing as much as 5-8% of their their reimbursement through illegal discounts taken by carriers who rents provider networks and agreements. When a physician contracts to join a health network, he or she agrees to accept a discounted rate in return for the network steering patients into his or her practice through a listing in the health plan’s directory. However, this discounted rate has been high-jacked through a deceptive market practice called a “silent PPO” or “rental network.” A silent PPO/rental network is neither insurance nor a health care payment plan offered by a health plan to its clients. Silent PPO/rental networks are not regulated and create a huge obstacle to heath care transparency.
A silent PPO/rental network generally takes no financial risk. The network “shops” around to find the lowest rates a physician has agreed to with any insurer, then “rents” that discounted rate to another entity without the physician’s knowledge or permission. Fourteen states have laws to prohibit these arrangements.
Patients also may suffer financially when the discount applied to their medical treatment is based inappropriately on the lowest contracted rate of a silent PPO/rental network. The patient may have to pay more toward the unpaid balance and incur higher coinsurance.
Silent PPO/rental networks provide no benefit to physician practices or their patients. Physicians may become wary of granting discounts under their existing contracts or are forced to increase their existing contracted rates to offset losses from these unethical manipulations.
Physicians should support legislation that will: 1) regulate how a physician’s contract rate is sold, leased, or shared among health plans, 2) ensure the physician’s right of action against anyone who improperly accesses their price discount and 3) encourage the state Department of Insurance to enforce current state insurance laws to alleviate this deceptive trade practice.
Compliants against a silent PPO or rental network should be filed with the state insurance commissioner’s office.
ASA Comments on 2010 Physician Fee Schedule
The American Society of Anesthesiology recently posted their comments regarding the 2010 Medicare Physician Fee Schedule.
- Medicare Anesthesiology Teaching Rule Payment Update– Beginning January 2010, CMS will provide full Medicare payment when a teaching anesthesiologist oversees anesthesiology residents on two overlapping cases, consistent with the Medicare Anesthesiology Teaching Funding Restoration Act of 2007, which became law last year.
- Removal of Physician-Administered Drugs for Purposes of Computing Update – CMS is proposing to remove physician-administered drugs from the definition of “physician services” for purposes of computing the physician update formula.
- Physician Payment Update – Under the proposed rule, and consistent with current law, CMS plans to implement the slated rate reduction of -21.5% for CY 2010. Since 2003, however, Congress has acted to avert significant reductions in Medicare physician payments, with the latest of these interventions occurring last July via the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). MIPPA provided physicians with a 0.5% update for the remainder of 2008 followed by a 1.1% update through December 31, 2009, thereby preventing what was at the time a projected 10.6% Medicare payment reduction.
- Physician Payment Refinements to Practice Expense (PE) – CMS proposes several changes intended to refine Medicare payments to physicians, which are expected to increase payment rates for primary care and other physicians, including anesthesiologists. The proposals include an update to the PE component of physician fees. For 2010, CMS is proposing to include data about physicians’ practice costs from a new survey, the Physician Practice Information Survey (PPIS), designed and conducted by the American Medical Association (AMA) and over 60 medical specialty societies including ASA.
- Physician Quality Reporting Initiative (PQRI) –For 2010, participants may earn an incentive payment of 2.0% of the eligible professional’s estimated total allowed charges for covered PFS services under Medicare Part B provided during the reporting period. For the CY 2010 PQRI, there are a number of proposed reporting options and reporting periods available. Key changes for CY 2010 include:
- Proposed inclusion of the Perioperative Temperature Management measure, which would provide a third measure for anesthesiologists (including Measures 30 (Timing of Prophylactic Antibiotics) and 76 (Prevention of Catheter-Related Bloodstream Infections: Central Venous Catheter Insertion Protocol);
- Implementing provisions of MIPPA that would enable group practices to qualify for a 2010 PQRI incentive payment based on a determination at the group practice level, rather than at the individual EP level, that the group practice has satisfactorily reported data on PQRI quality measures;
- Adding an electronic health record (EHR)-based reporting mechanism to promote the adoption and use of EHRs and to provide both eligible professionals and CMS with experience on EHR-based quality reporting.
