Silent PPOs could pose significant problems
A new policy from the American Association of PPOs (AAPPO) discourages silent preferred provider organizations. The term refers to PPOs that take advantage of a hospital’s discounted payment rate without directly negotiating with the hospital or providing an assured volume of payers.
AAPPO’s policy, approved by its board of directors in late June, says preferred provider organizations and providers should disclose all contractual intents and purposes when applying contractually permitted provider discounts. "We need to make sure that payers or consumers are not accessing provider discounts that they are not entitled to receive," said Bill Hale, president of the board of directors, adding the policy encourages fair business practices.
"This is a serious problem and has been for the past few years," explains Beth Ingram, CHAM, director of patient business services at Touro Infirmary in New Orleans. "Insurance companies sign up with third-party repricers — silent PPOs — and take discounts when, in fact, the information is not disclosed on the insurance card carried by the insured and the facility does not have a contract with the insurance company."
Louisiana takes action
Some repricers take discounts based on the hospital’s contract with another repricer because they have a contract with it, Ingram adds.
To combat the problem, she says, the state of Louisiana’s insurance commission has passed regulations that prohibit taking discounts unless the logo of the repricer appears on the upper left-hand corner of the insurance card.
When the logo does not appear, Ingram says,
a facility should appeal the underpayment. "We have been very successful at identifying these types of underpayments, but at a significant FTE [full-time equivalent] expense."
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