By Molly Mulebriar
Cash is King, especially in the medical reimbursement arena. Members of the 50% Club can attest to that. (Type in “50% Club” in search box on this blog).
Hospitals offer deep discounts for cash, often better pricing than managed care contracts. Contrary to representations of the BUCA’s, size means nothing. A lone patient with cash can always beat the big boys in health care pricing.
Imagine an employer sponsored health plan transitioning to a Cash Plan and the savings to be realized. Turning plan participants into cash paying customers – Is that possible?
A Texas TPA says it is not only possible, they are doing it.” Borrowing on the PBM method of financing, a line of credit allows the TPA to negotiate and pay facility claims quickly and efficiently.
A recent claim transaction illustrates the effectiveness of this approach. A gross billed charge for an outpatient procedure of $12,000 was reduced to less than $2,000 with a cash pre-payment by the TPA using their own line of credit to fund the payment. At the end of the month, the TPA recouped their funds through a claim draft against the Plan Sponsor’s claim account. The PBM financing model is now extended to include medical claims.
We knew it was only a matter of time someone would think of this and actually do it. (My father invented the weed eater in 1955 but never bothered to obtain a patent, much less build one). Turning ideas into action is hard for some.
Of course, it’s not as simple as one would expect. Plan document language and stop loss contracts must mirror the scheme. But details are someone else’s problem, right Uncle Hermann?
Editor’s Note: Molly Mulebriar is a free lance reporterette from Waring, Texas.
