Yesterday we received the following email from a third party administrator which illustrates how a PPO network can actually increase claim costs:
“Bill, here’s one for you. We had a non-network dialysis clinic treating on of our patients. Rather than taking the wrap discount , we audited the dialysis charges and paid the clinic on a cost-plus basis. After six months of accepting payments. the dialysis clinic sought out the network and got themselves in-network. The end result? Charges went up $200,000. Since we continued paying on a cost-plus basis the network contacted us and told us that we could no longer do that but had to accept the % off billed charges since they had a contract with the clinic. Our response to the network was that if they could convince the employer and the stop loss carrier that this is in their best interest then they would qualify as the best sales organization in the world. “
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