How to preempt surprise billing law changes

March 5, 2020

The Current Status Quo and a Plan to Help Hospital-Based Providers Stay Financially Independent.

It is happening.  Just as predicted, we are seeing insurance plans cut contracts to hospital-based providers ahead of the passage of proposed surprise billing laws in Congress.  Last fall, when we first saw a large national insurance plan cut rates 60% for no apparent reason, the question we asked was why?  Our team at Vachette and Stark Medical Auditing examined the facts and quickly determined these cuts were tied to the national narrative that says patients pay too much for health care.  The news cycle caught this narrative and put two or three examples of patients getting large bills for being out of network and boom: we have national hysteria about out-of-network billing.   The news media didn’t bother to mention the millions of dollars of free charity care and uncompensated care providers give away every year, nor did they mention the insurance take-back schemes or retroactive payment cuts. 

So here we are, insurance plans are going across the nation randomly cutting revenue to hospital-based providers, sometimes by as much as 60%.  So, what can you do?  

  1. It is imperative you communicate with your administration.  They must know exactly what is happening and how this will affect your income and their income.  FYI: the payers know hospital-based providers are in a pinch point between the administration and the insurance plan they will use this to their advantage to lower your income.
  2. Have a clause in your hospital Medical Director contract that sets a limit noting you will accept any plan which pays over 150% of current year CMS.  (It is best to get this set to a specific year as this will make negotiations and budgeting easier.)
  3. Install a clause in your contract which states the managed care plans you are obligated to sign must provide a cost-of-living increase equal to the national cost-of-living increase noted each year by the federal government.
  4. Communicate to your clients, i.e. your patients.  Remember your patients usually get their insurance through their employers.  Track your employers and build a communication informing them this strategy is being executed by the insurance companies and how it will affect their employees.  Most businesses are seeing double digit increases in premiums every year — imagine their response if they find out the insurance companies are deliberately lowering their payment to qualified providers to increase profits. 

All negotiation is leverage. You must develop solid communication with your administration and start building your leverage right now. 

This change is coming.  It will happen.

Call us at Vachette Pathology and Stark Medical Auditing.  We will come speak with you and your administration and lay out how this change it going to take place while working with your group to keep you financially strong and independent. 

Contact us at 517-486-4262. Ask for Mark Dietz, VP of Hospital-Based Consulting.

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