- Email: [email protected]
New hope for more equitable reimbursement
OPTOMETRIC ECONOMICS New hope for more equitable reimbursement Charles B. Brownlow, O.D.
W
ith insurance plans now a major source of revenue for most optometric practices, fair and equitable third-party reimbursement can be a major issue, particularly when out-of-network practitioners provide care for plan beneficiaries. Two recently announced developmentsda planned total overhaul of the system that many private sector health plans have been using to set nonnetwork reimbursements and an enhanced appeals system for
Private health care plans are developing a new database to determine ‘‘usual, customary, and reasonable’’ reimbursement for out-of-network providers as Medicare Advantage establishes a new independent appeals process for noncontracted practitioners. Medicare Advantage (MA) private fee-for-service (PFFS) plansdcould increase the chances that nonpanel providers will receive fair compensation for their services (or at least make it easier for practitioners to argue their cases when they do not). Optometrists should be aware of both.
Private plan database New York State Attorney General Andrew Cuomo (D) has announced terms of a settlement with UnitedHealth Group under which the insurer has agreed to stop using 2 databases created and marketed by its wholly owned subsidiary, Ingenix. The databases have been used for several years by many major insurance companies to determine ‘‘usual, customary, and reasonable’’ (UCR) fees for out-of-network services. The settlement with UnitedHealth, announced in January, was the result of an industry-wide investigation that was launched last year by the New York attorney general into the setting of out-of-network payments by insurance companies. Cuomo accused the companies of using the Ingenix databases to systematically pay patients and their health care
Charles B. Brownlow, O.D., is the associate director of the AOA Third Party Center and the associate director of the Wisconsin Optometric Association. He can be contacted at [email protected]. Opinions are those of the author and not necessarily those of the American Optometric Association.
providers considerably less than provided services were actually worth. A few days after Cuomo announced his settlement with UnitedHealth, the American Medical Association (AMA), the Medical Society of the State of New York, and the Missouri State Medical Association announced settlement of a related class-action suit they brought against the insurer regarding the Ingenix database. Under that settlement, UnitedHealth agreed to establish a $350 million fund, which will be used to compensate physicians and patients who have been affected by the flawed payment-setting system. In February, the AMA and several state medical associations announced that they were joining with individual physicians in filing separate class-action lawsuits against Aetna Health, Inc. and Cigna Corporation claiming the companies used rigged data provided by Ingenix to dramatically under-reimburse physicians. Cuomo’s settlement also garnered a pledge from UnitedHealth to spend another $50 million to create a not-forprofit entity that will develop a new, independent database for calculating usual and customary health care fees. It is hoped that the database created by the independent company will more closely reflect the actual usual charges and thus provide better information for use by patients and insurance companies. It was clear that many doctors had received comments from their patients, concerned that the numbers cited by the insurance companies seemed to indicate that the doctors’ charges were much higher than they should have been, according to the state attorney general’s office. Evidence gathered during the suits suggests that UnitedHealth and other insurers actually fed inaccurate data into the Ingenix databases and in turn paid Ingenix for use of those databases, essentially using the information as if it had been created by a process totally independent of the insurers themselves. Critics say there was nothing independent about the information, as it was carefully crafted to project the image that the UCR fees were lower than they actually were. Cuomo cited conflict of interest when describing the violations, with the Ingenix data created purely to permit insurers to pay less than the true UCR fees. He calculated that the ploy resulted in underpayments totaling hundreds of thousands of dollars to patients and their health care providers. One doctor, in a post on the Sermo.com health care provider Web site (www.sermo.com), went even further by stating, ‘‘If two sides are negotiating and one side has control over a particular piece of data and refuses to reveal it, how
1529-1839/09/$ -see front matter Ó 2009 American Optometric Association. All rights reserved. doi:10.1016/j.optm.2009.03.004
272 can you negotiate fairly?’’ He went on to express some optimism as a result of the settlement, saying, ‘‘.now, everyone will have the same information.’’ Another stipulation of the settlement is that the database of usual and customary fees will be available on the Internet, to provide more information for patients and for doctors as they consider their own fees. Access to this information could contribute to the recent trend toward more patient participation in their care regimens and even provide some information to help patients become better health care consumers. It is not known how many major insurers have used Ingenix, but Aetna has already agreed to stop using the Ingenix UCR system and has also pledged another $20 million to the development of the new database. Details regarding the planned new database have not yet been released. However, court documents indicate it will be operated by an independent not-for-profit entity. Syracuse (New York) University has been mentioned as a likely home for its operations. Interestingly, in spite of its alleged complicity in UCR manipulation, the settlement permits Ingenix to continue its business, which includes consulting and research relative to health care. Optometrists should review their contracts with insurance companies to see whether the Ingenix system has been used to calculate provider fee schedules. Practitioners may wish to share the news of this settlement with any insurance companies still using Ingenix data. An article posted on the American Medical News Web site (www.amednews.com) by Emily Berry notes, ‘‘.the deal could give physicians more negotiating power. Health plans had used UCR as a means to ensure that physicians who left their networks could not benefit as well financially from doing so, thus in theory giving doctors less incentive to make such a change.’’ Therefore, if a doctor’s current arrangement for contracted or out-of-network reimbursement is based on the flawed Ingenix data, it may be possible to renegotiate those arrangements. Doctors who are due payments as a result of the settlement will be notified later this year. It is unknown at this time whether any optometrists are among those who will receive compensation. It is clear, however, that the Ingenix system for calculating contracted and out-of-network payments has been used by insurers for calculating payments to many types of providers, including optometrists.
Medicare Advantage fee-for-service appeals The American Optometric Association (AOA) Third Party Center has learned that some optometrists have had trouble with reimbursements under MA plans. Most practitioners will remember that the MA plans were created by Congress a few years ago to provide an alternative to the standard Medicare Part B fee-for-service plan. Health maintenance organizations (HMOs) and other private insurers were encouraged to create new Medicare-managed care plans, ostensibly saving the federal government money in the
Practice Strategies process. The MA designers were given great freedom to be creative in their cost-savings efforts, although it is clear now that the MA plans are actually costing the government more than conventional Medicare Part B. It is very likely that the MA plans will be brought to task by Congress in the near future and may very well go the way of the Edsel. In the meantime, they are here and many patients in the typical optometric practice are probably enrolled in them. As of July 2008, more than 10 million Medicare beneficiaries were covered by MA plans. PFFS plans are one type of MA plan that has seen rapid growth. From July 2006 to July 2008, PFFS enrollment nearly tripled from 765,000 enrollees to 2.3 million. So it is important that optometrists know their rights and responsibilities under MA plansdand particularly under those MA private fee for service plans. First, the optometrist should understand that MA plans are required to include all the Medicare Part B covered services. They may offer additional services to attract subscribers to their plans, so it is common to see MA plans that also have dental and refractive vision benefits included. Each of the contracts is unique. Therefore, familiarity with the traditional Medicare fee-for-service program’s coverage and rules may not help a practitioner much when participation in an MA plan is being considered. It is critical that the practitioner read each MA plan very carefully, including the schedule of maximum payments, to determine whether the plan isdor is notdappropriate for the practice and its patients. Practitioners should review these plans just as they would any private insurance company’s HMOs or major medical insurance plans, rather than simply thinking of it as Medicare. This will help the practitioner to be more critical of the contents of the offering before deciding whether to accept it. Since their introduction, the MA plans have on more than one occasion caused quite a stir among health care providers. For example, the enabling legislation for Medicare Advantage private fee-for-service plans included an obscure provision that permitted a provider to be considered contracted with the plan if the provider accepted any payments from the plan. It seems many doctors, including some optometrists, have accepted Medicare MA payments, assuming they would continue to be considered out-ofnetwork providers, only to learn later that they were then considered inside-the-network and subject to the network’s terms and conditions. Congress corrected that idiosyncrasy with last year’s Medicare Improvements for Patients and Providers Act (MIPPA), but many practitioners are still trying to resolve payment disputes that occurred earlier. For those who still have payments in dispute, the U.S. Centers for Medicare & Medicare Services (CMS) Medicare Learning Network (MedLearn) recently issued some practical guidance (Important Information for Providers Serving Medicare Beneficiaries Enrolled in Private Fee-for-Service Plans – Medlearn Matters article SE0902, available on the CMS Web site at www.cms.hhs.gov/MLNMattersArticles/
Practice Strategies downloads/SE0902.pdf). The CMS has also assigned an independent agency, First Coast Service Options, Inc. (FCSO), to assist. If a practitioner has a dispute with an MA plan (for example, if the practitioner believes that reimbursements were incorrect) and has never actually contracted with that plan, it is important for the practitioner to contact FCSO and launch an appeal through them. As is often the case, the practitioner will have to learn some acronyms and master some ‘‘government-speak,’’ but it may be worth the effort. For example, Medicare considers those practitioners who have provided care to patients of an MA, even if they were not contracted with the MA, to be ‘‘deemed providers’’ (or in some cases ‘‘noncontracted providers’’). As a ‘‘deemed provider,’’ a practitioner who is having a dispute with an MA has rights that are not applicable to those practitioners who have formally contracted with the plan, including an avenue of appeal outlined in the previously mentioned MedLearn Matters article. This appeals process is intended to ensure that a deemed provider receives payment for a service that is equal to the payment a contracted provider would receive for the same services or is equal to payments that would be received under traditional Medicare Part B (that is, the Medicare Allowed Charges for participating physicians or the limiting charges for nonparticipating physicians). This review process is purely for disputes over payment for covered services. It cannot be used to resolve any disputes over covered services that are ruled to be ‘‘not reasonable and necessary’’ under local coverage determinations or national coverage determinations within the Medicare Part B system. The review process also will not be of any help to ‘‘contract providers’’ who have entered into contractual agreements to provide care under an MA. Those disputes must be handled in a manner consistent with the terms of the provider’s contract with the MA. To address payment disputes through an independent review by the FCSO, a practitioner must file a Payment Dispute Decision request within 180 days of receiving a written notice from the MA PFFS plan stating that an
273 appeal has been denied. The FCSO will respond within 60 days of receiving the request and may contact the practitioner for clarification or additional information. If the appeal requires additional time for resolution, the FCSO can also extend the deadline by 60 days. Any request for review must be in writing, preferably on the form that the FCSO has developed for the process. The form is available on the FCSO Web site (www.fcso.com/whatwedo/QIC/ 139297.asp). Be sure to include all the required details: Physician or supplier contact information including name, address, and National Provider Identifier Pricing information ZIP code where services were rendered Physician specialty (the physician specialty code for optometry is 41) The name of the MA PFFS plan that made the redetermination including the specific PFFS plan name and whether the provider/supplier is deemed or noncontracted The reason for dispute; a description of the specific issue A copy of the provider’s submitted claim with disputed portion identified A copy of the PFFS plan’s original pricing determination A copy of the PFFS plan’s redetermination (dispute) pricing decision A copy of the relevant portion of the plan’s provider ‘‘Terms and Conditions’’ or contract and any supporting documentation and correspondence that support the provider’s position that the plan’s reimbursement is not correct (this may include interim rate letters when appropriate) An Appointment of Provider or Supplier Representative Authorization Statement, if applicable The name and signature of the party or the representative of the party Requests for review should be mailed to: First Coast Service Options, Inc., PFFS Payment Disputes, P.O. Box 44017, Jacksonville, Florida 32231-4017.
W
ith insurance plans now a major source of revenue for most optometric practices, fair and equitable third-party reimbursement can be a major issue, particularly when out-of-network practitioners provide care for plan beneficiaries. Two recently announced developmentsda planned total overhaul of the system that many private sector health plans have been using to set nonnetwork reimbursements and an enhanced appeals system for
Private health care plans are developing a new database to determine ‘‘usual, customary, and reasonable’’ reimbursement for out-of-network providers as Medicare Advantage establishes a new independent appeals process for noncontracted practitioners. Medicare Advantage (MA) private fee-for-service (PFFS) plansdcould increase the chances that nonpanel providers will receive fair compensation for their services (or at least make it easier for practitioners to argue their cases when they do not). Optometrists should be aware of both.
Private plan database New York State Attorney General Andrew Cuomo (D) has announced terms of a settlement with UnitedHealth Group under which the insurer has agreed to stop using 2 databases created and marketed by its wholly owned subsidiary, Ingenix. The databases have been used for several years by many major insurance companies to determine ‘‘usual, customary, and reasonable’’ (UCR) fees for out-of-network services. The settlement with UnitedHealth, announced in January, was the result of an industry-wide investigation that was launched last year by the New York attorney general into the setting of out-of-network payments by insurance companies. Cuomo accused the companies of using the Ingenix databases to systematically pay patients and their health care
Charles B. Brownlow, O.D., is the associate director of the AOA Third Party Center and the associate director of the Wisconsin Optometric Association. He can be contacted at [email protected]. Opinions are those of the author and not necessarily those of the American Optometric Association.
providers considerably less than provided services were actually worth. A few days after Cuomo announced his settlement with UnitedHealth, the American Medical Association (AMA), the Medical Society of the State of New York, and the Missouri State Medical Association announced settlement of a related class-action suit they brought against the insurer regarding the Ingenix database. Under that settlement, UnitedHealth agreed to establish a $350 million fund, which will be used to compensate physicians and patients who have been affected by the flawed payment-setting system. In February, the AMA and several state medical associations announced that they were joining with individual physicians in filing separate class-action lawsuits against Aetna Health, Inc. and Cigna Corporation claiming the companies used rigged data provided by Ingenix to dramatically under-reimburse physicians. Cuomo’s settlement also garnered a pledge from UnitedHealth to spend another $50 million to create a not-forprofit entity that will develop a new, independent database for calculating usual and customary health care fees. It is hoped that the database created by the independent company will more closely reflect the actual usual charges and thus provide better information for use by patients and insurance companies. It was clear that many doctors had received comments from their patients, concerned that the numbers cited by the insurance companies seemed to indicate that the doctors’ charges were much higher than they should have been, according to the state attorney general’s office. Evidence gathered during the suits suggests that UnitedHealth and other insurers actually fed inaccurate data into the Ingenix databases and in turn paid Ingenix for use of those databases, essentially using the information as if it had been created by a process totally independent of the insurers themselves. Critics say there was nothing independent about the information, as it was carefully crafted to project the image that the UCR fees were lower than they actually were. Cuomo cited conflict of interest when describing the violations, with the Ingenix data created purely to permit insurers to pay less than the true UCR fees. He calculated that the ploy resulted in underpayments totaling hundreds of thousands of dollars to patients and their health care providers. One doctor, in a post on the Sermo.com health care provider Web site (www.sermo.com), went even further by stating, ‘‘If two sides are negotiating and one side has control over a particular piece of data and refuses to reveal it, how
1529-1839/09/$ -see front matter Ó 2009 American Optometric Association. All rights reserved. doi:10.1016/j.optm.2009.03.004
272 can you negotiate fairly?’’ He went on to express some optimism as a result of the settlement, saying, ‘‘.now, everyone will have the same information.’’ Another stipulation of the settlement is that the database of usual and customary fees will be available on the Internet, to provide more information for patients and for doctors as they consider their own fees. Access to this information could contribute to the recent trend toward more patient participation in their care regimens and even provide some information to help patients become better health care consumers. It is not known how many major insurers have used Ingenix, but Aetna has already agreed to stop using the Ingenix UCR system and has also pledged another $20 million to the development of the new database. Details regarding the planned new database have not yet been released. However, court documents indicate it will be operated by an independent not-for-profit entity. Syracuse (New York) University has been mentioned as a likely home for its operations. Interestingly, in spite of its alleged complicity in UCR manipulation, the settlement permits Ingenix to continue its business, which includes consulting and research relative to health care. Optometrists should review their contracts with insurance companies to see whether the Ingenix system has been used to calculate provider fee schedules. Practitioners may wish to share the news of this settlement with any insurance companies still using Ingenix data. An article posted on the American Medical News Web site (www.amednews.com) by Emily Berry notes, ‘‘.the deal could give physicians more negotiating power. Health plans had used UCR as a means to ensure that physicians who left their networks could not benefit as well financially from doing so, thus in theory giving doctors less incentive to make such a change.’’ Therefore, if a doctor’s current arrangement for contracted or out-of-network reimbursement is based on the flawed Ingenix data, it may be possible to renegotiate those arrangements. Doctors who are due payments as a result of the settlement will be notified later this year. It is unknown at this time whether any optometrists are among those who will receive compensation. It is clear, however, that the Ingenix system for calculating contracted and out-of-network payments has been used by insurers for calculating payments to many types of providers, including optometrists.
Medicare Advantage fee-for-service appeals The American Optometric Association (AOA) Third Party Center has learned that some optometrists have had trouble with reimbursements under MA plans. Most practitioners will remember that the MA plans were created by Congress a few years ago to provide an alternative to the standard Medicare Part B fee-for-service plan. Health maintenance organizations (HMOs) and other private insurers were encouraged to create new Medicare-managed care plans, ostensibly saving the federal government money in the
Practice Strategies process. The MA designers were given great freedom to be creative in their cost-savings efforts, although it is clear now that the MA plans are actually costing the government more than conventional Medicare Part B. It is very likely that the MA plans will be brought to task by Congress in the near future and may very well go the way of the Edsel. In the meantime, they are here and many patients in the typical optometric practice are probably enrolled in them. As of July 2008, more than 10 million Medicare beneficiaries were covered by MA plans. PFFS plans are one type of MA plan that has seen rapid growth. From July 2006 to July 2008, PFFS enrollment nearly tripled from 765,000 enrollees to 2.3 million. So it is important that optometrists know their rights and responsibilities under MA plansdand particularly under those MA private fee for service plans. First, the optometrist should understand that MA plans are required to include all the Medicare Part B covered services. They may offer additional services to attract subscribers to their plans, so it is common to see MA plans that also have dental and refractive vision benefits included. Each of the contracts is unique. Therefore, familiarity with the traditional Medicare fee-for-service program’s coverage and rules may not help a practitioner much when participation in an MA plan is being considered. It is critical that the practitioner read each MA plan very carefully, including the schedule of maximum payments, to determine whether the plan isdor is notdappropriate for the practice and its patients. Practitioners should review these plans just as they would any private insurance company’s HMOs or major medical insurance plans, rather than simply thinking of it as Medicare. This will help the practitioner to be more critical of the contents of the offering before deciding whether to accept it. Since their introduction, the MA plans have on more than one occasion caused quite a stir among health care providers. For example, the enabling legislation for Medicare Advantage private fee-for-service plans included an obscure provision that permitted a provider to be considered contracted with the plan if the provider accepted any payments from the plan. It seems many doctors, including some optometrists, have accepted Medicare MA payments, assuming they would continue to be considered out-ofnetwork providers, only to learn later that they were then considered inside-the-network and subject to the network’s terms and conditions. Congress corrected that idiosyncrasy with last year’s Medicare Improvements for Patients and Providers Act (MIPPA), but many practitioners are still trying to resolve payment disputes that occurred earlier. For those who still have payments in dispute, the U.S. Centers for Medicare & Medicare Services (CMS) Medicare Learning Network (MedLearn) recently issued some practical guidance (Important Information for Providers Serving Medicare Beneficiaries Enrolled in Private Fee-for-Service Plans – Medlearn Matters article SE0902, available on the CMS Web site at www.cms.hhs.gov/MLNMattersArticles/
Practice Strategies downloads/SE0902.pdf). The CMS has also assigned an independent agency, First Coast Service Options, Inc. (FCSO), to assist. If a practitioner has a dispute with an MA plan (for example, if the practitioner believes that reimbursements were incorrect) and has never actually contracted with that plan, it is important for the practitioner to contact FCSO and launch an appeal through them. As is often the case, the practitioner will have to learn some acronyms and master some ‘‘government-speak,’’ but it may be worth the effort. For example, Medicare considers those practitioners who have provided care to patients of an MA, even if they were not contracted with the MA, to be ‘‘deemed providers’’ (or in some cases ‘‘noncontracted providers’’). As a ‘‘deemed provider,’’ a practitioner who is having a dispute with an MA has rights that are not applicable to those practitioners who have formally contracted with the plan, including an avenue of appeal outlined in the previously mentioned MedLearn Matters article. This appeals process is intended to ensure that a deemed provider receives payment for a service that is equal to the payment a contracted provider would receive for the same services or is equal to payments that would be received under traditional Medicare Part B (that is, the Medicare Allowed Charges for participating physicians or the limiting charges for nonparticipating physicians). This review process is purely for disputes over payment for covered services. It cannot be used to resolve any disputes over covered services that are ruled to be ‘‘not reasonable and necessary’’ under local coverage determinations or national coverage determinations within the Medicare Part B system. The review process also will not be of any help to ‘‘contract providers’’ who have entered into contractual agreements to provide care under an MA. Those disputes must be handled in a manner consistent with the terms of the provider’s contract with the MA. To address payment disputes through an independent review by the FCSO, a practitioner must file a Payment Dispute Decision request within 180 days of receiving a written notice from the MA PFFS plan stating that an
273 appeal has been denied. The FCSO will respond within 60 days of receiving the request and may contact the practitioner for clarification or additional information. If the appeal requires additional time for resolution, the FCSO can also extend the deadline by 60 days. Any request for review must be in writing, preferably on the form that the FCSO has developed for the process. The form is available on the FCSO Web site (www.fcso.com/whatwedo/QIC/ 139297.asp). Be sure to include all the required details: Physician or supplier contact information including name, address, and National Provider Identifier Pricing information ZIP code where services were rendered Physician specialty (the physician specialty code for optometry is 41) The name of the MA PFFS plan that made the redetermination including the specific PFFS plan name and whether the provider/supplier is deemed or noncontracted The reason for dispute; a description of the specific issue A copy of the provider’s submitted claim with disputed portion identified A copy of the PFFS plan’s original pricing determination A copy of the PFFS plan’s redetermination (dispute) pricing decision A copy of the relevant portion of the plan’s provider ‘‘Terms and Conditions’’ or contract and any supporting documentation and correspondence that support the provider’s position that the plan’s reimbursement is not correct (this may include interim rate letters when appropriate) An Appointment of Provider or Supplier Representative Authorization Statement, if applicable The name and signature of the party or the representative of the party Requests for review should be mailed to: First Coast Service Options, Inc., PFFS Payment Disputes, P.O. Box 44017, Jacksonville, Florida 32231-4017.