A PPO Network Within A PPO Network?

“The “preferred provider” strategy, used in tiered and narrow networks, is not a new concept. For decades, the term “preferred provider” has been defined by the managed care industry as a physician, hospital or other health care provider that provides health care services to patients usually at a discounted fee. Today, in an attempt to curtail health care costs, some health insurers and other payers are deploying products that stratify physicians and other health care providers into tiered or narrow networks that are based primarily on cost of care.”

Translation: We have an extensive PPO network of contracted medical care providers. Some of these providers have signed contracts with us that are more cost effective to you. For example, Dr. Smith, as greedy as he is, demands, and we agreed to those demands, to be paid 195% RBRVS. But, down the street Dr. Smith, the stupid bastard that he is,  agreed to 110% RBRVS. We have some more stupid bastards on our network, so we decided to group those into a tier within the full network and we call that a PPO within a PPO, or SBPPO. For those employers who really want to save money, we will sell them access to the Stupid Bastards PPO  (SBPPO) network.

See AMA’s report, “Tiered and Narrow Physician Networks” – PPO Network Within A PPO Network

Editor’s Note: Does this mean that when insurance consultants evaluate PPO networks and use the old  tried and flawed method of random sample claim repricing, an astute sales representative would reprice the claims using his SBPPO network to make his numbers look better?

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