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This Costs an Arm and a Leg
Discussion of the Cost of
Usual and Customary Reductions
Medical pricing has never
been under as much scrutiny as it currently is.
Medicare, HMO's, worker's comp carriers and repricing companies all seem to have
come up with a different rate to pay for the same procedure -- all without
stepping foot into your office or facility.
Most of these rates are arrived at by some mathematical calculation which
factors in wholesale price quotations or rates charged by other medical
providers.
Unfortunately, this often amounts to an apples-to-oranges comparison.
Medical providers are under no obligation to agree to price reductions not
associated with a contractual agreement. Therefore, medical providers need to
educate their staff on what charges are subject to write-offs and which ones
should be pursued for full payment. You may be able to successfully appeal for
additional payment if the paid amount is not a contractually-agreed upon rate.
If a bill is reduced because it is over the "usual and customary charge,"
instruct patient account representatives to first contact the insurance carrier
and request a list of the specific items which were denied and why. Some
repricing companies routinely reject any ambiguous charges. "Surgical tray"
might be rejected because the tray items are unknown. "IV solution" may be
denied because the carrier does not know what particular solution was used and
the concentration. The simplest resolution may be to supply additional product
information. If such information is not available, the provider should request,
at a minimum, payment of the average price the company has approved for these
items with other providers. Providers may also demand an on-site audit in order
to resolve such billing issues.
Also, deal directly with the insurance company rather than a third party
repricing company. The insurance company has a contractual obligation to the
insured to pay the claim.
You can appeal the usual and customary denial based on the verification of
benefits.
If the insurance carrier verified that benefits are 80%, however, the usual and
customary reduction reduces the payment to 50%, the carrier may not be honoring
the verification of benefits. There are many state and federal cases that
indicate the carrier has an obligation to pay at that rate verified at the time
of admission.
If the reductions are large, you may want to discuss the potential for
compromise in quality that such reductions may lead to. The bottom line is that
nobody, insurance carrier or patient, really wants to affect the quality of
health care.
If the insurance carrier is complaining that your services cost an arm and a
leg, remind them that quality health care just costs dollars and cents; it saves
an arm and a leg.
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