HEALTH PLANS TIGHTEN THE BELT - AROUND ANESTHESIOLOGISTS' AND OTHERS' MIDSECTONS
June 20, 2011
Making it more expensive for beneficiaries to choose teaching and other higher-cost hospitals is one way that health insurers are protecting their margins. Raising deductibles and copayments in order to keep premiums deceptively level is another. The well-respected Drew Altman, Ph.D., President and CEO of the Kaiser Family Foundation (a health policy think tank that is independent of the Kaiser health plans), recently made three predictions “I am confident about.” Among the three was the following:
THE RETURN OF TIGHTER MANAGED CARE. Recently in my home state of Massachusetts, reports surfaced about Blue Cross Blue Shield offering a more affordable insurance product by contracting selectively with less expensive community hospitals, requiring patients to pay more if they want to go to the state’s renowned and powerful major academic centers. Other insurers in the state have also introduced tiered network plans that have higher patient cost-sharing for more expensive hospitals or exclude them altogether. In the mid and late nineties, in what was called “the managed care backlash,” the American people revolted against tighter forms of managed care with limited provider networks and tough utilization review. Looser forms of PPOs became the dominant mode for delivering health insurance in the country as a result. Anecdotal evidence from around the country suggests the Massachusetts plan may be the canary in the coal mine. What was not palatable in the late nineties may be more palatable today as people and employers accept tighter managed care as a less onerous alternative to ever increasing deductibles and cost-sharing. Faced with higher and higher out of pocket payments, the public may be willing to accept limitations on what doctors they can see and which hospitals they can go to as well as stricter review of what services they use. For many, compromising on provider choice and utilization review will be the lesser evil compared with a $5,000 deductible.
Within the last few weeks, numerous anesthesia practices have received letters from CIGNA announcing a shortening of the time to file claims. Presumably, physicians in other specialties have received similar correspondence. According to the form letters, “claims submitted to CIGNA on and after August 1, 2011 must be for services that were rendered within 90 days of the claim submission date in order to be considered for payment. This applies in instances where CIGNA is the primary payer. If CIGNA is the secondary payer, the claim should be submitted to us within 90 days from the date of your receipt of the explanation of payment from the primary payer.”
The letters included proposed language amending the participation agreements and gave practices 30 days from the date of the letter to notify CIGNA in writing if they objected.
At least here the health plan mailed the change notice to its participating physicians. Too often health plans merely post the notice among their “policies” and their participation agreements provide that new policies automatically become part of the contract if the physician does not file a timely objection. You should make sure that your staff regularly checks the policies section of your payer websites, as we do monthly or more frequently.
Thus CIGNA joins the growing minority of health insurers with a 90-day time limit for filing claims. Six months or a full year are more common periods. Of course, it is to the practice’s advantage to submit claims as quickly as possible. Cash flow may depend on prompt payment.
Nevertheless, in some instances it is not possible to complete the paperwork within 90 days. It can be very difficult to ascertain just who the patient’s health insurer might be – the hospital information may be wrong; the patient may not respond to requests for the correct insurer name. Credentialing a new clinician may take longer than 90 days. Increasingly, payers such as Care First are refusing to credential anesthesiologists and CRNAs retroactively. Claims for services provided before credentialing was completed can go into the black hole of uncompensated care. These problems may be what CIGNA is banking on. Remember that you can always file an imperfect claim as a placeholder within the timely-filing period.
Where it is possible to file claims early, groups may find it easier to manage claim rejections because they have the time needed to submit additional or corrected information. Do not make the mistake of accepting the denial of a claim at face value. The denial may be nothing more than a trial balloon and an appeal may be both simpler and likelier to succeed than you imagine. The American Medical Association guesstimates that:
[P]hysicians are losing billions of dollars in revenue each year by not appealing inappropriate claim denials. Health insurers save money when they partially pay, delay or deny a claim payment because only a small percentage of physician practices routinely review their claims data. The most common reason why physician practices do not appeal denied claims is the incorrect belief that appealing claims will create an increased administrative burden on the practice without the desired result.
The AMA offers a “Heal the Claims Process”™ web site at www.ama-assn.org/go/healthatclaim with numerous resources to help you appeal claims efficiently.
Payments That May Not Comply With The Contract
Rule #1: Always know what is in each of your payer contracts. The health plans may offer changes that seem innocuous or are easily overlooked at renewal time, or, as we have seen above, through mid-term policy announcements. More than ever, it is critical to look at the entire proffered contract and not just at the dollar conversion factor.
One old ploy that still surfaces regularly is for the health plan to start bundling the placement of monitoring lines and blocks for post-operative pain with the anesthetic. Most recently, a Blue Cross Blue Shield plan in California tried to make this change when renewing the participation agreement. Be prepared for something similar by checking your data for the total average value of the procedures to be bundled and offering the alternative of an offsetting conversion factor increase.
As noted in the June 13, 2011 Alert, Version 5010 of the HIPAA electronic transaction standard will do away with anesthesiologists’ option to report time units and will require the reporting of actual minutes. Although total actual minutes are being submitted in many instances already, contracts frequently obligate the payer to round the minutes up to the nearest whole time unit. Increasingly, payers are attempting to switch to a fractional time unit payment system like Medicare’s. Alternatively, they will allow rounding up only if the marginal or fractional unit contains a minimum number of minutes. For example, a case lasting one hour and 19 minutes would yield 5 whole time units (75 minutes) and 4 additional minutes. On the West Coast, HealthNet is attempting to allow the full final unit only if there are at least 5 additional minutes. In a large anesthesia practice, the lost units can quickly add up to tens of thousands of dollars.
Some of the other reasons why remittances may come up short against expected payments were covered in the settlement agreements in the class action multi-district litigation against numerous health insurers. Anesthesiologists should still be tracking the insurer payout-reduction practices by which you may have been affected previously, such as:
- excessive overpayment recovery efforts,
- misleading statements on explanations of benefits,
- reducing payment for add-on codes by using multiple-procedure discount algorithms,
- not recognizing visit codes appended with a 25 modifier when billed with a service procedure or surgical code, and
- not paying for codes submitted with 59 modifiers, whether or not they follow CPT guidelines.
Anesthesia-specific modifier problems have arisen repeatedly and should always be on our radar. The Medicare medical direction/personal performance/teaching modifiers can offer a pretext for a payment reduction. One health plan, for example, simply assumed that every claim for anesthesiologists’ services was in effect a modifier QK (medical direction) case and would be followed by a claim for the CRNAs’ services, and cut the allowed amount by 50 percent.
In this context, we should also mention increasingly stringent health plan policies and practices designed to constrain their spending on pain management services. Prior authorization is creeping back in, both explicitly and in the form of medical necessity policies for which the pain physician can seek an advance (or ex post facto) determination from the health plan’s medical director.
Lastly, as we all learned following the successful prosecution in New York of United Health Care for using a rigged claims database, whatever the payer contends is the usual, customary and reasonable (UCR) charge may be demonstrably false or erroneous. “Anesthesia exceptionalism” has made it easy for payers to misunderstand this specialty’s typical payment methodology. Many anesthesia groups have been able to have payments adjusted by showing the inaccuracies of the payers’ UCR data.
Tiered Networks and Other Restrictions on Patients’ Choice of Provider?
Tiered networks impose greater copayments on patients who choose to use lower tiers of physicians and hospitals, i.e., the more costly providers. “Narrow” networks simply remove providers from the network and do not cover any charges from them. The health plans employing this strategy claim to rate providers based on quality and efficiency, but generally accepted quality and efficiency standards are even more elusive than those based purely on providers’ relative charges. (See Adams JL, Mehrotra A, et al. Physician Cost Profiling – Reliability and Risk of Misclassification. N Engl J Med 2010;362:1014-21. Fewer than 10 percent of physicians had cost profiles that were at least 90 percent accurate.)
Insurer interest in provider cost profiling is clearly on the rise. The Harris County (Texas) Physician Newsletter contained the following assertion in its March 1, 2011 Bulletin that:
Health plans have taken the lead in measuring physicians and physician groups’ quality and efficiency in providing medical services. You need to pay close attention to “ANY” letters received from the insurance companies that pertain to de-selections, rating or your profile received. Why? Because the outcome of the insurance company’s determination can affect your referrals, current patient base and credentialing stipulation. The notices you receive will not provide any specific information; therefore, it is imperative that you request the detailed information and understand the methods on how your rating or profile is determined.
In Minnesota, pending legislation (SF 2700 / HF 3042) requires health plans to provide to physicians and other providers the methodology the plan uses when calculating tiered networks. They must also let the provider know what tier they are in prior to the effective date of the tiered plan.
Have any health plans restricted patients’ access to certain anesthesiologists on quality or efficiency grounds? Accountable Care Organizations (ACOs) certainly have the potential to do so – the health policy commentariat has noted ACOs’ resemblance to old-fashioned HMOs -- but ACOs are still in the gestational stage.
We don’t know. We would very much like to hear from any of our readers who may have an answer. Thank you!
With best wishes,
President and CEO