The changes in the health care industry through the Affordable Care Act (ACA) and other elements have the commercial payers scrambling to ensure they are not left holding the bag. We have seen some very interesting and troubling trends developing over the past couple of years.
Rates – While it is not much of a surprise that rates are not going up, the way in which payers are trying to decrease rates has been. Aetna has been decreasing rates virtually by fiat. Ostensibly they send a one page letter noting the rates have been reviewed and that the doctor will now be on some ‘standard’ rate set. What they don’t mention is the new standard is up to 50% less than what they have been paying.
Many of the commercial payers used to use Medicare as a standard and would pay 10% to 30% more than Medicare. Now most of the payers have a proprietary rate set. If you receive a letter noting a rate set or they actually delineate a series of codes for the rate set, be sure to check rates for each category of service. The office visit rates may still pay at 110% of Medicare but surgical or ultrasound services may now be at 80% of Medicare.
Provider Networks – Many payers are trying to tighten up the number of providers they have in the network. The rationale is that they, the payers, can control costs a bit better if they have a smaller, more integrated team of contracted physicians. This has created difficulties for physicians trying to establish a new practice – closed panels are popping up from coast-to-coast.
This mindset has also become difficult to devastating for existing practices who are summarily dropped from being a contracted provider. If that payer is a major payer for the practice, it is tough to absorb say a thirty percent decrease in your patient volume.
The payers are being told they cannot dramatically increase premiums, both by employer groups and by political pressures. Many were essentially arm twisted into participating with the ACA plans. The hospitals hold very firm with the payers in their rate negotiations as do the very large multi-specialty groups that are either independent or owned by the hospital. That leaves a very vulnerable target group… small specialty practices and non-hospital owned surgery centers who are not essential to the payers’ ongoing operations.
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