MCOs Try New Ploy: Demanding Fee Discounts

There's a new twist for out-of-network psychiatrists who care for patients enrolled in managed care organizations (MCOs). In the past few months, APA's Managed Care Help Line received information from three members who were asked to discount fees for patients they saw out of network. Generally, when something new is afoot in the managed care world, it doesn't take long for the Help Line to hear about it.

A number of managed care organizations contract with other companies to contact providers and entice them into accepting discounted fees for the services they provide to the MCO members. The discounts requested of the three callers ranged from 20 percent to 30 percent.

One of the callers, an APA member from Wisconsin, received a notice from a company based in Florida, ASMED Health Partnership. This company sought to remit 80 percent of the “qualifying expenses less the employee copay/coinsurance to be remitted no later than 12-14 days after approval.” Recipients were informed in lettering they couldn't miss,“ THIS AGREEMENT IS IN LIEU OF AN AUDIT.” This statement implies that physicians who do not agree to the 20 percent discount may have their billings audited, or, conversely, those who agree to the discount will not be audited.

Moreover, the notice, and the other ones reported to the Help Line, demanded an immediate response. “Please respond on or before 2:00 Eastern Standard Time,” reads the ASMED letter. “IMMEDIATE RESPONSE REQUIRED.”

Ellen Jaffe of APA's Office of Healthcare Systems and Financing called ASMED and asked why the company demanded an immediate response. While she failed to get an adequate answer to that question, she did learn that ASMED sometimes works on a bounty system and receives a percentage of the money it saves the MCO.

The other two callers were psychiatrists in New York City who saw patients covered by UnitedHealthCare (UHC). UHC has apparently contracted with MultiPlan, an organization that has its corporate headquarters in New York, to get out-of-network providers to agree to discounted fees. A press release on the MultiPlan Web site explains how new software allows third-party payers to“ submit out-of-network claims directly to the MultiPlan Network for an additional opportunity to save on medical costs. Clients pay for access on a percentage of savings basis.”

MultiPlan tells physicians that UHC has asked the company to do a“ bill process review” involving “evaluation for compliance with recognized standards for reasonable and customary (R&C) pricing, coding, and utilization.... In consideration of accelerated processing, prompt payment, and reduction of patient liability on this claim, we are asking that [provider named here] (Provider) agree to accept the adjusted price listed below as the full payment for services rendered on the following dates.”

One notice sent to the Help Line requested that a $1,000 bill be discounted to $700; the other demanded a reduction from $675 to $499.50.

Brian T. Lipton, M.D., a New York psychiatrist who has received several requests for discounted fees from MultiPlan, was incensed. “There is so much wrong with this latest ploy from insurers. It is an intrusion on the physician-patient relationship and is done without the knowledge or permission of the patient, and it's a form of blackmail. The insurer implies that the patient's claim will not be paid in a timely fashion unless the physician agrees to a discount. It's just unethical.”

Karen Sanders, the director of APA's Managed Care Help Line, advises APA members that they have no obligation to comply with requests for fee reductions. The out-of-network physician's relationship is solely with the patient, not with the MCO. The patient agrees to the physician's standard fee with the understanding that the MCO will pay according to what is delineated in the patient's insurance contract. Thus, the issue is really between the patient and the MCO, since the patient has probably already paid the out-of-network physician. Nonetheless, a physician's refusal to discount fees could carry an insidious price: it could undermine the patient-doctor relationship if the patient is not reimbursed in a timely manner—or at all.

If you've received requests for discounts for out-of-network care you've provided to patients, please contact the Managed Care Help Line by phone at (800) 343-4671 or by e-mail to [email protected].▪