Day: September 2, 2010

BCBS Texas Announces New Out-of-Network Reimbursement

 

September 1, 2010Allowable Amount Definition for Non-Contracting Providers to Change

Blue Cross and Blue Shield of Texas (BCBSTX) is migrating to a new out-of-network reimbursement approach. As groups renew with BCBSTX, the majority of out-of-network claims will be reimbursed based on a pre-determined percentage of Medicare rates.

Medicare provides a national standard recognized by all providers that is used to reimburse a significant portion of all medical claims in the United States. As a result, we expect the new methodology to increase transparency for providers and members through availability of information about Medicare standards. In a number of isolated instances, such as when a service is not priced by Medicare, a default pricing method will be used. This will be stated in the certificate of coverage. Our methodology has been submitted to and approved by state regulators in Texas.

We will begin meeting with our group customers to explain the new Medicare-based methodology. We anticipate that the overall impact of the new methodology will not be significant due to Health Care Service Corporation’s broad provider network, which results in more than 97 percent of all claims we process to be in-network.

To help avoid confusion for members during the transition to the new methodology, communication tools will be provided to the Full Service Units to address any concerns. Members also will be encouraged to continue to get estimates from out-of-network providers for the cost of services and to call us to help determine estimated allowable amount.

The migration will be upon group renewal beginning on Sept. 1, 2010, dependent upon successful testing.

 Editor’s Note: We like this approach and are encouraged that Blue Cross likes it too. Next step is to convert their PPO contracts in a similar fashion. With upcoming requirement under Obamacare, full PPO contract terms must be publicly disclosed, thus ending the PPO world as we know it today. This is a good thing (some change is good).

 

BISD Audit Results In

The Brownsville Independent School District’s external audit of their self-funded health plan is now part of the public record. The audit was a “review and verification of BISD Insurance Consultant Recommendation of the medical plan proposals for 2009-2010 and HealthSmart’s rebuttal of said recommendations.”

A “he said, she said” it appears, is now a a “he said, she mislead”.

In reveiwing PPO savings, many focus on “discounts” as the basis of determinining “savings.” Department Store “A” sells the exact same freezer as Department Store “B”. Department Store “A” advertises a 50% off sale, while Store “B” advertises 40% off on the same freezer. But % off what? Store “A” retails the freezer at $500 while Store “B” retails the same freezer at $400.

Surely the sale at Store “A” is better than at Store “B”!

Such are the flaws utilized by some in evaluating PPO discounts.

We found this audit report to be a fascinating reading.  A few exerpts include:

“In the course of our claim administration audit, CTI learned that the claim negotiation expense charged by HealthSmart to BISD also included fees for addtional discounts it negotiated with its own network providers………………………CTI has never in its experience seen where a TPA will negotiate additional discounts on in-network provider claims…………………it is not typical for the TPA to attempt to negotiate an additional discount since it would violate that provider’s discount agreement with the PPO………………….” Page 8 of CTI Report

“Again, CTI has not previously in its audit experience seen a situation where a TPA negotiates additional discounts with in-network providers on a regular basis and pays itself an additional fee for doing so……………” Page 9 of CTI Report

“In CTI’s opinion the unusual nature and material amount of additional fees associated with HealthSmart Benefit Solution’s negotiations with providers contracted with by its own affiliate PPO, HealthSmart Preferred Care, is worth of further analysis.”

You may review the Executive Summar of the CTI report here:  BISD Audit – Executive Summary

We are not posting the full report here. The full report may be obtained from the BISD under the Open Record Act.

Editor’s Note: This audit raises more questions than answers.  Comparing PPO plan savings is impossible without reviewing specific hospital contracts and charge masters, something the CTI report is missing it seems.

We have the BISD audit report performed prior to the HealthSmart contract. A comparison to the CTI report should prove interesting.

BCBS Illinois Implements Non-PPO Reimbursement Methodology

News from the Blues for Producers - Blue Cross and Blue Shield of Illinois

 

September 1, 2010

BCBSIL’s Migration to a New Non-contracted Reimbursement Approach [All Markets]

Blue Cross and Blue Shield of Illinois (BCBSIL) is migrating to a new non-contracted reimbursement approach. As groups renew with BCBSIL, the majority of non-contracted provider claims will be reimbursed based on a pre-determined percentage, as set forth in the certificate of coverage provided to members, of Medicare reimbursement rates. Medicare provides a national standard recognized by all providers that is used to reimburse a significant portion of all medical claims in the United States. As a result, we expect the new methodology to increase transparency for providers and members through availability of information about Medicare standards. In a number of isolated instances, such as when a service is not priced by Medicare, a default pricing method will be used. This will be stated in the certificate of coverage. Our methodology has been submitted and approved by state regulators in Illinois. Please note that Medicare-based reimbursement rates for non-contracted providers will not have any impact on our Medicare Secondary Payer process.        

We will begin meeting with our ASO group customers to explain the new Medicare-based methodology and to walk through options available for particular plans. We anticipate that the overall impact of the new methodology will not be significant due to Health Care Service Corporation’s broad independently contracted provider network, which results in over 97 percent of all claims we process to be in network.

To help avoid confusion for members during the transition to the new methodology, communication tools will be provided to the FSUs to address any concerns. Members will also be encouraged to continue to get estimates from non-contracted providers for the cost of services and to call us to help determine estimated allowable amount.


A Division of Health Care Service Corporation, a Mutual Legal Reserve Company,
an Independent Licensee of the Blue Cross and Blue Shield Association.

 

 Editor’s Note: We applaud BCBS Illinois for this move towards greater transparency. We only hope that more payers will do the same and even take it a step further; eliminate lucrative PPO contracts entirely and pay fair and reasonable reimbursement rates.