I periodically receive calls from clinicians who are informed by previously unknown insurance companies that they are empaneled. That is to say, practitioners receive notifications from an insurance company that a patient they are seeing has coverage and that they must accept the reimbursed rate offered by the insurance company. This is quite confusing if the clinician hasn’t signed up with that particular company. Here’s how this often happens:
Provider contracts with insurance companies usually have three very powerful clauses: (1) assignability, (2) the ability to unilaterally change reimbursement rates, and (3) automatic renewals.
When a contract is assignable, it means that one of the parties can delegate, sell, or otherwise redirect the responsibilities/obligations of the contract to another party. These assignability clauses allow insurance companies to buy and sell these very valuable provider lists, after which the buyer of the provider list then becomes the new party to the contract.
Here’s an example of how this works:
Dr. Perls signs a contract to become a provider with UniHealth. The terms of the contract (sometimes called a provider agreement) allow UniHealth (but not Dr. Perls) to assign the rights and responsibilities to another party, to unilaterally change reimbursement rates (subject to notice), and for automatic renewals of the contract. Unihealth contracts to pay Dr. Perls $100 for an hour of individual psychotherapy.
Two years later, as part of a multi-party acquisition and merger, UniHealth sells its provider list to MegaHealth. The terms of the deal between UniHealth and MegaHealth call for UniHealth to assign its existing contracts to MegaHealth.
Shortly after the deal between UniHealth and MegaHealth is completed, Dr. Perls receives a letter from MegaHealth, an insurance company she has never heard of. That letter goes into the trash along with junk mail solicitations for postage meters, professional catalogs, and CE course advertisements. Dr. Perls doesn’t realize that the letter contains a notification that (1) MegaHealth has bought UniHealth’s provider lists, and (2) MegaHealth will now be offering reimbursement rates as posted on its website.
Six months later Dr. Perls receives a call/fax/letter from MegaHealth informing her that one of her patients, who was paying out of pocket at $180 for an hour of psychotherapy, is actually a MegaHealth subscriber and because of this Dr. Perls is obligated to accept the MegaHealth payment of $50 for an hour of psychotherapy. In addition, MegaHealth asserts that Dr. Perls has been overcharging her patient by $130 per hour and that a refund is due to the patient for the last 6 months of overcharges.
This is the point in the hypothetical when I get a call from Dr. Perls. There are a number of option available to Dr. Perls and I get the matter resolved for her. However, my experience in dealing with a number of cases like this has revealed some practice tips:
Tip #1: Keep a copy of the provider agreements you sign. Keep it keep it keep it. Insurance companies will revise these agreements from time-to-time and send you notices that (1) they have made a change, and (2) you are hereby notified of the change. Can they do this? Sometimes yes, sometimes no. The changes may or may not be valid. But it’s important to keep the agreements you agree to because some time later if/when you have a dispute with them, they will likely assert that they acted properly according to the terms of the provider agreement. The agreement they produce is often the one with the changes they have made, not the one you signed. It makes your attorney’s job a lot more efficient if he/she has a copy of the original contract.
(Parenthetical point: you keep a copy of your office lease, right? The contracts you sign with insurance companies often involve much greater sums of money than your office rent, so it’s even more important that you keep them.)
Tip #2: Keep a “provider agreements” chart for each insurance panel you join. If they send you a letter notifying you of a change to the agreement, put it in the file. Believe it or not, insurance companies often assert that they did something (e.g., provide notice of a change in payment, procedures, etc.) that they didn’t actually do. Being organized is an incredibly effective means to avoid being steamrolled by a large corporation. Just because they say something happened doesn’t mean it actually happened. Chances are that you are better organized than they are. Treat insurance companies like a disturbed patient with perceptual difficulties and a tendency to cross boundaries. Consider using the chart notes format. For example, when you have a billing dispute you can write, “10/15/09 – spoke to Jeff R. in billing. He informed me that they had not received the three previous documents I have sent. He asked me to re-fax, which I did today.”
Tip #3: Read your mail. I know this sounds obvious, but you really don’t want to miss something.
Tip #4: Make sure you know how to resign from an insurance panel. The procedures for doing so are often contained in the contract you sign.
Tip #5: Remember: you are not powerless. Just because they do something doesn’t mean it’s right. Just because they say something happened doesn’t mean it actually happened. Insurance companies don’t have the monopoly on reality. You have options.
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