So just what will their value proposition be?
Rockford, IL (PRWEB) May 20, 2010
With the signing of the Patient Protection and Affordable Care Act and the first significant provisions taking effect for hospitals on September 23rd, it is now time for hospitals to call for completely new contracts with all of the insurance companies. The majority of language and provisions in existing PPO (Preferred Provider Organization) and other discount contract forms are now rendered insignificant and possibly invalid based on the provisions in the new law. This need for contract wholesale rewrites represents a real and significant opportunity for hospitals to correct past mistakes in accepting onerous discount contract terms with many insurance companies on behalf of payors.
CRC has reviewed thousands of provider contracts nationally and finds that they will not be in alignment with the new law as soon as September 23rd of this year.
Signed into law by President Obama on February 23 this year, the Patient Protection and Affordable Care Act has many provisions that take effect "six months after the signing of the bill" or on September 23rd of this year. Included among those changes are;
- Sec. 232 (b) of the Act, Requiring Fair Grievance and Appeals Mechanisms of the Act provides: "(b) INTERNAL CLAIMS AND APPEALS PROCESS based on federal ERISA law
- Sec. 232 (c) of the Act also creates a new federal external review process based on ERISA claim regulation to provide for an impartial, independent, and de novo review of denied claims
- Sec. 233 of the Act, Requiring Information Transparency and Plan Disclosure, enhanced the existing ERISA disclosure obligations for the plan and insurance company, and requires "Accurate and Timely Disclosure"
- Sec. 233 (5) of the Act, Cost-Sharing Transparency, requires the plan to disclose to the healthcare provider the real fee schedule, plan UCR limit for individual service and supplies at CPT & HCPCS code level
- Sec. 235 of the Act, Timely Payment of Claims, provides new federal "Prompt Pay" laws, based on Medicare Part C timeframe, Managed-Care Medicare, to comply with the requirements of section 1857(f) of the Social Security Act
- Sec. 238 of the Act, State Prohibitions on Discrimination against Health Care Providers, has adopted "Any Willing Provider Laws" from existing state laws
- Sec. 251 of the Act provides new consumer protections, with state law compensatory and punitive damages as remedies for exchange-participating health plan members
- Sec. 257 of the Act allows state attorneys general to sue for the compensatory and punitive damages on behalf of the private citizens of the state for any violations by the exchange-participating health plans
- Sec. 262 of the Act, Restores Application of Antitrust Laws to Health Sector Insurers.
This should cripple the existing managed care practice model and in conjunction with vigorous enforcement of the new provision for federal ERISA claim regulations, complete disclosure of plan information and fee schedules will now be mandatory under a proper ERISA appeal.
According to F. Scott Winslow, CEO of Claims Recovery Company (CRC), in the past contracting rounds, the insurance companies have often presented hospitals with a "take it or leave it" ultimatum on joining their discount networks that they re-sold to one another and convinced the employers that they needed to function. The sales pitch was that the hospital received "prompt payment" (45 days, not really so prompt), and "access" to information and marketing that would possibly bring them more patients. This of course, has proved to be a zero sum game on finding any new patients and the prompt payment is now a matter of law. The contracts must be rewritten to recognize these new legal requirements including the new rules on disclosure and appeal. Additionally, with the restoration of the same Anti-Trust rules that the rest of American business live by, it is highly doubtful that the "insurance companies" can even maintain these so called, PPO networks.
Given that the new law now provides hospitals with a prompt payment guarantee, a standardized, published federal appeal process, rights to specific documents and other information, enforcement provisions for non compliance, a legal allowance for 'any willing provider' activity, Winslow wonders "what will be the incentive for a hospital to sign a new discount contract with a health insurance company? Especially when these so called insurance companies are actually only writing an insurance policy about 35% of the time? The other 65% of the coverage is "self insurance" or employer responsibility and the "insurance company" is actually only a paperwork processer (TPA-Third Party Administrator) for the real insurer, the employer."
"So just what will their value proposition be?" asks Winslow, "They don't write the insurance, they don't guarantee the prompt payment, they don't control the appeal and they can't deliver any additional business. What then is it, exactly, they have to offer a hospital?"
CRC is a hospital contracts and compliance expert with leading experience in federal ERISA law. CRC based in Rockford, Illinois, offers, as an outside service to hospitals, a process to appeal insurance claims under federal ERISA law as a patient advocate. CRC's approach has been utilized by hospitals and other providers coast to coast. CRC offers a contract review service aimed at assisting hospitals with their negotiations with contract intermediaries, insurance companies and payors.
More Information: Linda Swanson
Or S. Winslow(at)crcclaim(dot)com