Trench Stories II (or, “Do The Math”)

It’s difficult to narrow down the math stories to just one, there are so many, but here’s this week’s for a start. From one of the only payors who behaves worse than United/Oxford, a letter to a client of ours in the northeast:

The best offer the [we] will provide to your practice is 100% of
2007 Medicare for E&M codes only for a two year term. If you choose to
accept the range of CPT codes we discussed within E&M, [we]
will offer 105% of 2007 Medicare for a two year term.

As we discussed, there will be no enhancements offered for lab services or
immunizations/vaccines. Although we understand your dissatisfaction with
the current reimbursement structure, our position on this has not changed
regarding the negotiation.

Please advise as to how you would like to proceed.

I know how I would have liked them to proceed, but this practice is more reasonable.

Still, the math is out on the table. Which would be better for your practice – 100% of all E&M codes (99201-15 and 99381-95) OR 105% of just the established codes (99211-5, 99391-5) with all other codes at your existing rates?

Here’s today;’s hint: do the math. Whenever an insco gives you a choice, there’s one that benefits you more than the others. My gut instinct – and the practice’s – was that 100% across all the E&Ms was the way to go. But I took the time, and did the math. Which the insurance companies never expect you to do.  Otherwise, why are they even giving you a choice? The results?

The difference, based on the last 12 months of business, between what they are paid now and the deal I would have taken without looking: $180,000. With the second deal? $205,000. That’s a $25,000 difference which, in pediatrics, is real money. They are taking the second deal.  Looks like the insco had a $200K limit they were trying to stay under and, by giving you a choice, increased their odds of beating their own self-imposed limit.

Note that this is a small/medium sized pediatric group who just negotiated a +$200K deal on its own with a significant payor.  Awake, sleeping giants indeed.

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