June 7, 2010

You already know that basing private health plan payment rates on the Medicare Fee Schedule would bankrupt your practice. We do not know of any anesthesia practice that has ever been forced to accept 100% of the Medicare conversion factor, but there are some groups that have agreed to 150% or other multiples of Medicare.

Regardless of the adequacy of the payment amount in a commercial or Blue Cross-Blue Shield participation agreement, linkages to Medicare can have nefarious and unforeseeable consequences. Private payers may adopt Medicare policies, such as the rejection of the consultation codes (CPT™ 99241-99245 and 99251-99255), and apply them to their non-Medicare lines of business.

Anthem, the Blue Cross Blue shield licensee for many jurisdictions, stated in its “Network Rapid Update ” of March 12, 2010,  that it was going to “follow the CMS recommendations” and pay at the lower evaluation and management (E/M) service rate to all providers who participates in any Anthem “products or networks if the provider is indexed to Medicare or a percent of the Medicare fee schedule.” The bulletin went on to specify that only “providers billing for consultations to members who are not part of the Anthem Medicare Advantage products or networks and/or whose contracted fee schedule is not tied to Medicare or a percent of Medicare fee schedule may continue to bill the consultation codes and receive separate reimbursement.”

Of course, adopting a cost-cutting policy in Medicare’s wake does not depend on an explicit contractual linkage to the Medicare Fee Schedule.  Another payer, Coventry, simply announced that it would stop recognizing the consultation codes at of April 1, 2010. HealthNet of California notified physicians that it would automatically recode consultation codes to E/M visit codes effective May 1, 2010, and that it would reject all outpatient consultation codes received after January 1, 2011.

While United Healthcare does not appear to be denying claims for consultations in its commercial lines of business – please let us know if we are wrong about that -- many of us recall that United took advantage of the Medicare teaching anesthesiologist rule that limited attendings to 50% of the allowable if they supervised two concurrent resident cases.  Unlike Medicare, United was not paying for any part of the residents’ cost out of another bucket comparable to Medicare’s direct and indirect Graduate Medical Education payments to teaching hospitals.

As a general conclusion, it is a good idea to eliminate language incorporating either Medicare payment rates or policies from your payer contracts. Such language is increasingly common and deleting it is not always possible, but your negotiators may be able to obtain clauses that circumscribe potential application of Medicare rules or adverse changes.

Claim Your Share of the UnitedHealth Group UCR Settlement

Speaking of United, some $350 million is available to physicians who file a claim against United Healthcare for their share of the settlement of a lawsuit against the company over its system for manufacturing "usual, customary, and reasonable" (UCR) charges for out-of-network services. ABC is filing claims on behalf of all clients. The deadline to file a claim for a portion of the settlement fund (with the administrator, Berdon Claims Administration) is October 5, 2010.  Physicians who want to file an objection or opt out of the settlement must do so by July 27. The settlement is scheduled for final approval in federal court in New York on September 13. Distribution of the funds to successful claimants is going to take some time.

United’s various subsidiaries and affiliates are also covered by the settlement agreement. If you submitted claims to any of the following entities, you may be entitled to a share of the settlement:

• Oxford Health Plans, Inc.,
• Sierra Health Services, Inc.,
• PacifiCare Health Systems, Inc.,
• Mid-Atlantic Medical Services, Inc. (MAMSI),
• Golden Rule Insurance Company,
• HealthWise,
• HealthPartners of Arizona, Inc.,
• PHP, Inc.,
• MetraHealth,
• GenCare Health Systems, Inc.,
• Student Resources (former student insurance division of MEGA Life and Health Insurance Co.),
• Fidelity Insurance Group,
• Touchpoint Health Plan, Inc.,
• Neighborhood Health Partnership, Inc.,
• Definity Health Corp.,
• John Deere Health Care, Inc.,
• IBA Health & Life Assurance Co. and IBA Self-Funded Group, Inc.,
• Arnett Health Plans, Inc.,
• HCT,
• United Medical Resources, Inc. (UMR),  and
• Fiserv, Inc.

You will find all the tools you need to file claims or to opt out on the AMA’s dedicated website, www.ama-assn.org/go/ucrsettlement.

Complete the ASA-AAA Survey of Commercial Conversion Factors Now

Reliable and up-to-date information on the real “usual and customary” contractual payment rates for anesthesia services is the best defense against fictitious numbers such as those that led to the United Healthcare settlement.  Hard numbers on the commercial value of anesthesia services is also key to hospital contract negotiations.

Your own participation in the leading survey of anesthesia commercial payment rates is indispensable.  The greater the denominator, the more compelling are the data in the surveys now being conducted on an annual basis by ASA, with MGMA-AAA cosponsorship.

The survey closes on June 30, 2010. If you are an anesthesia provider (and if you are the right person in your group to supply the information), please do not delay in logging on to www.surveymonkey.com/s/9T6MYDF  and completing the questionnaire.

Thank you in advance for your very valuable participation.  We are also grateful to ASA and to the AAA for organizing the survey.

With best wishes,

Tony Mira
President and CEO