TPA Cracks Down on Forbidden Tactics Used by Out-of-Network Surgical Centers

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Administering health benefit plans for employer-clients across the U.S., Cypress Benefit Administrators has seen a recent increase in prohibited practices being used by out-of-network providers. The third party administrator provides seven examples to show how it is addressing these issues and saving plans an average of more than $20,000 per health claim in the process.

Cypress Benefit Administrators of Appleton, Wisconsin
Seeing these numbers is eye-opening and it reinforces just how essential a thorough claim review system is in identifying overcharges and unlawful practices.

A third party administrator (TPA) based in the Midwest, Cypress Benefit Administrators is taking action after seeing a significant increase in unlawful tactics used by out-of-network (OON) ambulatory surgical centers (ASCs).

The TPA’s Argus Claim Review division has found many cases of OON ASCs encouraging members to have elective procedures done at their facilities with the offer to waive any patient responsibility fees, including deductibles and co-insurance.

While beneficial to the member from a cost-savings standpoint, this practice – particularly when enticing a patient into utilizing services – is typically prohibited with laws varying from state to state. There are certain exceptions when a true financial hardship can be demonstrated.

In Cypress’s experience of analyzing its member health claims over the last several months, the OON ASCs are charging thousands more for services than in-network providers would, with rates well beyond what is allowed by the Centers for Medicare & Medicaid Services (CMS).

“It is often assumed that a medical claim will just pass right through and be paid in full without careful scrutiny of the charges,” Doney said. “That’s not how it works with Argus Claim Review. Because of our vigilant review process, our team is catching these inflated claim costs and putting a stop to them.”

With a look at seven recent health claim examples that relate to ASCs providing OON elective services to members and waiving standard fees, Cypress shows how its Argus Claim Review was able to save the respective plans $140,795.46 on a total of $210,631.87 in claim charges. This comes out to an average of more than $20,000 in savings per claim.

  •     $13,914.67 was billed for a bunion surgery with $6,464.01 paid as the reasonable percentage of CMS; $7,450.66 in plan savings
  •     $15,612.00 was billed for a hysteroscopy with $6,771.20 paid as the reasonable percentage of CMS; $8,840.80 in plan savings
  •     $21,638.00 was billed for a hip arthroscopy with $12,120.81 paid as the reasonable percentage of CMS; $9,517.19 in plan savings
  •     $23,000.72 was billed for a tympanoplasty with $5,795.55 paid as 100% of the CMS allowable; $17,205.17 in plan savings
  •     $41,438.48 was billed for an intra-articular fracture with $13,657.10 paid as the reasonable percentage of CMS; $27,781.38 in plan savings
  •     $53,128.00 was billed for shoulder arthroscopy with $15,123.54 paid as 200% of the CMS allowable; $38,004.46 in plan savings
  •     $41,900.00 was billed for knee arthroscopy with $9,904.20 paid as the reasonable percentage of CMS; $31,995.80 in plan savings

“Seeing these numbers is eye-opening and it reinforces just how essential a thorough claim review system is in identifying overcharges and unlawful practices,” Doney said. “Each example here represents thousands of dollars that could have been lost and had a real impact on the employer’s bottom line.”

In addition to identifying and paying the reasonable amounts on a case-by-case basis with all health claims, Cypress is ensuring that Plan Document language is worded accordingly. It is also demanding proof that the ASC has collected the patient’s OON deductible and co-insurance fees if an appeal is submitted.

A privately held company headquartered in Appleton, Wis., Cypress Benefit Administrators has been pioneering the way toward cost containment in self-funded health benefits since 2000. The third party administrator (TPA) is the country’s first to bring claims administration, consumer driven health plans and proven cost control measures together into one package for companies ranging from 50 employees to thousands of employees. It serves employer-clients across the U.S. with additional locations in Portland and Salem, Ore., Omaha, Neb. and Denver, Col. For more information on Cypress and its customized employee benefits, visit http://www.cypressbenefit.com.

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Dave Willems
Willems Marketing & Events
+1 920.750.5013
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Tom Doney
Cypress Benefit Administrators
920.968.4613
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