Broker Asks RiskManagers.us Opinion on Direct Contract Offer

mad

The game is over. Plan sponsors are becoming more educated. The secret ingredients of managed care contracts are now known to many. And they are mad as hell and not going to take it anymore.

An insurance broker called our office this morning asking for our opinion of a direct contract offer between an anesthesia group and his self-funded client. The offer was 65% of billed charges.

Our Response

I don’t have the data in hand on this group, but from experience and my feeble memory tells me their billed charges average north of 600% of Medicare. An agreement based on 65% of billed charges = 390% of Medicare or more.

I was informed yesterday that a bill was introduced in the Texas legislature last week addressing balance billing by anestheologists in Texas. If passed will limit balance billing to 135% of Medicare.

In response to (Name of Anesthesia Group) offer, I would inform (Name of Plan Sponsor) the following:

I have reviewed the (Name of Anesthesia Group) proposal and recommend (Plan Sponsor) decline the offer. Charge based reimbursement rates are derived off a discount off billed charges. To agree to a discount off an unknown, ever changing number does not constitute a prudent business practice and is a direct violation of fiduciary duties under ERISA. (Plan Sponsor) is subject to ERISA.

As a side note, the provider community and their managed care partners take consumers for fools. For years they have gotten away with stealing from the middle class of this country, sucking off 19% of our country’s gross national product into the hands of greedy hospitals and doctors. Anyone who would agree to a discount off an unknown, ever changing number has got to be more than stupid. The (Anesthesia Group) thinks (Plan Sponsor) is stupid because everyone else buying insurance for their employees throughout this country has proven to be stupid, year after year.

The game is over. Plan sponsors are becoming more educated. The secret ingredients of managed care contracts are now known to many. And they are mad as hell and not going to take it anymore.

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