American Medical News
August 9, 2010
Dropping an insurer requires care and analysis
By Victoria Stagg Elliott
Approximately 55.8% of medical practices surveyed earlier this year by the Medical Group Management Assn. said they were renegotiating or eliminating low-paying commercial payer contracts as a way of dealing with the recession.
But deciding which insurer to drop and then, if appropriate, actually taking them off the rolls requires careful analysis and handling.
Questions to consider include: What are the rates that a particular insurer is paying? How does what the insurer actually pays compare with what is billed? How long does it take an insurer to pay? What is the denial rate? Are preauthorization procedures onerous and frequently required? Is there something about a payer that makes it more difficult to work with than others?
Experts suggest next looking at how many patients would be affected.
Other issues to consider include how dropping an insurer may affect referrals from other clinicians, and whether cutting a plan from the rolls means that another will cover more than a quarter of a practice's patient volume. Most experts say that particular ratio would give one insurer too much sway over a practice. However, they acknowledge that it may be unavoidable in some areas of the country because of insurance industry consolidation.
Physicians should then contact referring physicians as well as affected patients.
Any communication with patients should avoid badmouthing a particular insurance company and include information about possible options, such as staying with the practice and paying an out-of-network rate, or transferring to another physician, experts said.
Comment: Had President Obama and Congress selected an improved version of Medicare to provide stable, life-long health care financing for everyone, they would have eliminated the injustices, inequities, and especially the instability of the double contracting processes required by the private insurance model of health care financing.
What is meant by double contracting? Much attention has been given to the purchase of a health care contract - a private health insurance plan - but little attention is paid to the private insurer contracts extracted from physicians and other providers in the health care delivery system.
Whether it is individuals or employers who purchase the private plans, everyone is acutely aware of the perpetual changes in premiums, benefits and cost sharing, which often requires a change in plans or even a change in insurers. Contracting on the patient side is quite unstable, which has allowed the insurers to surreptitiously shift ever more of the financial responsibility to the patient who needs to access care.
Now look at the other contract - the one that the provider of health care services signs with the private insurer. As insurers adopt ever more innovations, the desire and even the ability of the physician or other providers to accept or renew the contracts diminishes. That creates instability in the physician and hospital networks which can very directly impact the insurer/patient contract. Patients may end up stuck with insurance plans that have terminated relationships with their health care professionals.
Instead of being stuck with a single, one-size-fits-all, government program (that would cover all legitimate beneficial services for all of us), we were given choice - choice of unstable, double-contracted private plans offered by the double-crossing private insurance industry. Nice choice.
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