NN&I - May 2010
Facility Management 38 Nephrology News & Issues May 2010www.nephronline.com reduction of any health care benefit claims payments." It should be no surprise that when litigation ensues, many repricers will attempt to remove themselves from the lawsuit, leaving behind their cli-ents to fend for themselves while keeping the up front fees it extract -ed when the relationship was first formed. In a recent motion filed by Dialysis Cost Containment in a case referenced above, DCC noted, "to the extent such plan adminis -trators decide to pay less than the face value of [the provider's] claim, that (sic) is their own determina-tion, based on DCC's non-binding recommendation." Implications for the clientsIn instances where the self-insured health plan holders and third-party administrators have an obligation to pay a benefit based on usual and cus-tomary charges for the services pro-vided, it will face liability if such the amount they used to calculate the UCR amount is challenged and found to be misleading or incorrect. Whether they will have a claim against the repricer who suggested the UCR amount in the first place will depend, in substantial part, on the contract between the two parties. For plan holders and third-party administrators considering using a repricer, it is recommended that they review the contract to see whether the repricer is willing to stand behind its recommendation or disclaims it, plac -ing the ultimate responsibility on their client. Even worse, the contract could contain an indemnification provision by the repricers causing their clients to be not only responsible for its own attorneys' fees and liability, but also be responsible if the repricer is ever sued. What seemed like an easy way to save money on cost containment services can quickly turn into a very expensive proposition for the plan holders and third-party administrators. And because it takes a long time to resolve these cases, cost of litigation can be high. As to the ultimate question of lia-bility, only time will tell whether the recommended UCR rates are defensi -ble. It should be noted, however, that the most comprehensive database sources for UCR determinations those owned by United Healthcare's Ingenix subsidiarywere recent -ly found by the New York Attorney General's Office to be riddled with errors, resulting in underpayments of up to 28% or more for certain ser -vices. United Healthcare and other insurers accessing the database have already settled claims for nearly $500 million dollars with the New York AG's office and private litigants, with more expected to come. And with many repricers relying on their own internal databaseswhich very likely lack the breadth and sophistication of the Ingenix databaseto recom- mend payments of UCR charges that are a mere fraction of the now-dis-credited Ingenix amounts, it is no surprise that providers are feeling quite bullish on their ability to prove that the recommended amounts bear little resemblance to a proper deter -mination of UCR for dialysis services in any geography. A repricer case studyDialysis Cost Containment (www.prn-inc-us.com) says on its website, "we routinely see discounts of 80% to 90% using our proprietary U&C program that protects the member from balance bill-ing." The company includes a form contract on the site for plans and admin-istrators wishing to engage DCC's ser -vices. It includes a provision stating: "In exchange for services rendered, the client agrees to pay DCC immediately upon receipt of invoice, 25% of sav-ings. Savings is defined as the differ -ence between the provider's full billed charges and the DCC recommended payment." This is problematic for the client in several ways. First, what does the client get? Did DCC recommend a payment level? What was that based on? What if it were wrong? What if the client were-later sued by the provider and the rec-ommendation cannot be defended? While the basis for the recommended level is a mystery, we gain insight into the latter two questions by the following statement, also excerpted from the DCC form agreement: "The client shall be wholly responsible for all decisions with respect to payment, denial (based on medical necessity and plan provisions), repricing or reduction of any health care benefit claims payments." That may explain why the fee due to the repricer is payable immediately. The self-insured health plan holder has paid the fee on savings it could have negotiated directly with the provider. Most providers will negotiate a rate that is below billed charges in exchange for certainty and timeliness of payment. Under the contract example above, the plan holder has given away 25% of the savings they could have gotten on his or her own with a phone call to the provider instead of the repricer. Where repricers have helped a client legitimately gain access to a negoti-ated rate that has been approved by the provider in advance, they have done something concrete to earn their fee, rather than simply making a "recom-mendation" that may or may not be jus-tified and may or may not be overturned later by a court or in a settlement. Of course, even in those circumstances the client will be paying a fee for any reduction from the provider's fully billed charges, which they may have been able to obtain through direct negotiation with the provider. And at a rate of 25%, the client pays dearly for those savings. Facility Management_0510_3.indd 38 4/16/10 4:56:25 PM
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