It may surprise medical providers to learn that, whenever they submit bills to workers’ compensation insurance companies, there are other companies that spring into action hoping to take a piece of the action.
The two primary businesses that make money from the handling of medical bills in the workers’ compensation system are PPO networks and repricing companies. These groups earn fees by helping the insurance companies to pay less than the full amount of medical charges.
I will always remember a vice president for a national insurance company admitting to me, “We don’t care what the doctor charges; we refuse to pay a bill in full no matter the charge.” I have reviewed thousands and thousands of billings, and I can tell you that this unusually revealing statement is most definitely true.
Here is how it works: The insurance company receives a medical provider’s bill, and sends it on to a repricing company for review and handling. The repricing company first seeks to determine whether any PPO networks have secured contracts from the provider permitting the application of discounted fee schedules to the bill. If so, those schedules are applied, and the provider will receive a payment along with an Explanation of Review that will inform the provider that its bill has been reduced in accordance with the signed PPO contract.
But if the repricing service finds no PPO contracts in effect for a particular provider, the bill is still never paid in full. Instead, the repricing service will apply certain reduction standards of their own devise, then issue partial payment along with an Explanation of Review that lists the criteria applied in that particular case.
The repricing service earns a commission or a line item audit fee based on the amount it successfully saves the insurance company off the bill. If a PPO network’s contract played a key role, the network company will also earn a commission.
In Virginia, PPO network contracts will generally be enforced. But in the absence of such contracts, many of the discounts claimed by repricing services can be defeated by medical providers if they should choose to challenge the underpayments through the Virginia Workers’ Compensation Commission’s medical provider claims process.
At MeyerGoergen, our experience has been that PPO network contracts in the workers compensation industry are a notoriously bad bargain for medical providers. Once “out of network”, a provider can successfully challenge repricing companies’ bill slashing and greatly improve their realization rates on their workers’ compensation billings. Let us show you how we can work with your billing staff to get you the payments to which you are entitled and improve your practice’s financial performance.
The materials on this website are meant for informational purposes only and nothing contained in this site is to be construed as legal advice. If you need legal advice, you should contact an attorney directly. Do not act upon the information on this site without seeking professional guidance. Information on this website about specific matters or success in previous cases is not meant to be a prediction or guarantee of similar results in any other case. Each case consists of factors and applicable law unique to that case and you should consult an attorney.
