When It Is, When It Isn’t

“You certainly were not stupid enough to believe that we can live with a paltry 135% of Medicare reimbursement, do you?”

I have a client who has accessed a managed care contract, negotiated by a third party,  that was represented to be approximatley 135% of Medicare several years ago. With the annual escalater clause, over the past two years the reimbursment rates have gone up 14%. Of course, the fee to access this contract has escalated too.

Recently we looked at a hospital claim for DRG 175 paid under this contract within the past 60 days. Total paid was about $19,000 (billed charges were about $23,000). We asked for copies of the claim audit which we compared to the managed care contract (yes, we do have a complete copy of the contract). The audit worksheets were incomplete which has made it difficult to do a line by line comparison. I am not certain an audit was even performed on this claim but that is besides the point.
When you do a google search for DRG 175 you will find one website of interest: http://www.findacode.com/drg/175-pulmonary-embolism-mcc-drg-code.html
You will note that Medicare allowed for DRG 175 is approximated at $8996.96 )(click on DRG Calculator).  If that is true, then this plan sponsor paid about 200% of Medicare. Forget the 14% contract escalator clause over the past two years.
So the question begs: If the contract was represented to be approximately the equivalent of 135% of Medicare, how is it that this singular claim was paid at +200% of Medicare?
A good answer would be something like this: “This claimant was elderly, and there were complications involved that required increased care and costs.”
A more accurate reason could be that the DRG reimbursements outlined in the contract are not inclusive of add-on costs such as MRI’s, certain lab testing, etc.
Seems to me that hospitals  (and audit firms) are good at covering their bases. “Here is our low, competitive DRG rates, but oh, by the way, all the other charges in this contract may come into play too since they are additional charges we can pad the bill with….  “You certainly were not stupid enough to believe that we can live with a paltry 135% of Medicare reimbursement, do you?”
Molly Mulebriar
www.mollymulebriar.org
Waring, Texas

 

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