The In’s and Out’s of Third-Party Pricing Companies
THE IN’S AND OUT’S OF THIRD-PARTY PRICING COMPANIES
There is much in life that can either be a help or a
hinderance and it all depends on how it is viewed. The more you know, the more
you can transform apparent obstacles into building blocks. The more you know
about third-party pricing companies, the better chance you have at navigating
out-of-network rates.
When a provider is contracted with a third-party pricing
company, that provider has increased their chances of avoiding the
out-of-network entanglement. If the provider is out-of-network with a patient’s
insurance but that insurance is also contracted with the provider’s third-party
pricing company, then that company will pay the according to the contracted
rate as opposed to the plan’s out-of-network usual and customary benefit.
Occasionally, claims will be selected for front-end
third-party negotiation. A representative will reach out and begin to negotiate
a price for upcoming service. Once the price is settled on there will be
expedited payment without the hassle of medical necessity. This is a service
that cannot be relied upon because it seems to come at random. When it is
offered, all details must be strongly considered because the benefits may or
may not outweigh the negatives.
There are difficulties with third-party pricing companies.
Sometimes insurance carriers use these companies for large discounts on allowed
amounts without notifying the provider. The phrases “geographic practice cost
indices” or “conversion factor” come into play. These can be negotiated if they
are recognized for what they are and if you are willing to make your way
through the red tape. Other variations are that the pricing company is
incorrectly inserting themselves when an existing contract with the provider
exists and the actual contracted rate is less than the newly proposed
negotiated rate. Additionally, the provider may agree to a reduced negotiated
rate, but the carrier does not intend to pay these amounts and advises the
provider to bill the patient for these reduced amounts. Lastly, many times the
negotiated rate offer is far less than your lowest acceptable rate and all
negotiations should be compared to your other contracted rates for similar
services.
As always, Medical Practice Solutions is here to help. Let
MPS navigate these mysterious waters on your behalf. Our time is spent helping
you so you can spend your time bringing health to our communities.