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Clearinghouse Bullying

November 30, 2012 / 0 Comments / in insurance / by Chip Hart

A good friend remarked that my blog is a little "stale" these days, and she was right.  I am so caught up in putting out fires these days - ARRA, PCMH, portal design, etc. - that I forget to come back here.

(And, hey, it's a lot of work to take visiting clients out to lunch and dinner!)

Let me give you some insight into the latest fiasco we're dealing with here.  I am going to keep the names of the entities in question redacted because the last time we publically complained about one of them, some of our staff received harassing calls at home from the company.  I'm not joking.

Here's the scenario: a BCBS program in one of the states where we have just under a dozen clients has advertised to its practices that they provide "free, real-time eligibility" functionality.  Our clients have seen this and asked for it.  Because we act as our own clearinghouse and generally provide these services for free, we got right on it.  We love real time eligibility and must deliver it a few hundred thousand times a week to our clients.

But, it isn't so simple in this case.

The first thing we learned is that the BCBS in question has signed an exclusive contract with a particular clearinghouse vendor.  Thus, we can't work directly with the insurance company, we have to go through a third party.  And, surprise!, this BCBS isn't on the magic list of "free claims/eligibility" for this third party.  What?  How can BCBS say one thing and the vendor say another?  It's easy - while there may not be a per-transaction fee for each of the claims...there is a $5,000 setup fee to get started.

So, free to the clients, but the third party clearinghouse still gets paid.  Maybe you don't think $5,000 is a big deal, but consider this:

  •  we already have real-time eligibility connections with this vendor and have for years.  This is just toll charge, the work was completed years ago.
  • that $5,000 charge only appeared after we went to BCBS and complained about the $15,000 charge the vendor told us we would incur if we submitted any real time transactions to them through our already existing integration.

It gets even better.

If we do decide to enter into this agreement, both PCC and the client then have to sign exclusive agreements with the third party vendor.  What does that mean?  It means neither PCC nor the clients can use any other clearinghouses to submit their claims or eligibility requests.  PCC already has existing contracts with quite a number of other clearinghouses in different parts of the country.  And our clients use us to submit via the most cost effectice and supported solution.

How is this legal?  How is this not restraint of trade? Two small pediatric practices can't discuss their pricing legally, but an insurance company representing >50% of covered lives in a state can force their physicians to sign an exclusive, expensive contract to get real-time EDI transactions?

ARGH.  And we wonder why health care costs so much here.

Tags: insurance

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