The lack of pre-negotiated prices and inconsistent settlement values inherent in out-of-network charges creates challenges for workers' comp payers. But a California-based technology company says that its model of offering prompt payments to providers who agree to discount their rates is creating a win-win for providers and workers' comp payers.
"Mitchell NHQ Negotiation Services reduces these challenges by delivering negotiated settlements for out-of-network medical services providers resulting in an average 30-40 percent success rate," according to a statement from the company. The company recently announced a partnership with Coventry Workers' Comp Services, enabling the division of Coventry Health Care to "augment its cost and care management solutions for employers, insurance carriers and third-party administrators."
An optimized network strategy is among the top 10 best practices in medical bill review identified in a quarterly report on industry trends. However, a strategy of tiered provider networks only works when the medical provider is included in a network.
Workers' comp payers typically look to preferred provider organizations or voluntary networks to help manage medical costs. There are now tiers of provider networks.
"If a medical bill is not in-network for PPO A, you go to PPO B, or PPO C; and some can go to PPO F. It just cascades down until it gets a hit," explained Greg Gaughan, vice president and general manager of Mitchell NHQ Negotiation Services. "At some point the medical bill will not be in-network, and it will be returned to the payer as out of network, not covered. So the payer is left to pay it in full, which they typically do."
In fact, up to 70 percent of medical provider charges may be out-of-network. For payers it adds up to "significant medical spend if they pay full price," he says.
Last year Mitchell acquired NHQ, or National Health Quest, Negotiation Services to target out-of-network medical charges.
"We acquired NHQ to say 'look; at some point there is going to be a bill with no in-network pricing, and there is a tremendous opportunity," Gaughan said. "Mitchell was looking for a way to work with providers and payers in a win-win type situation, not a win-lose."
The process involves contacting out-of-network providers and negotiating a discount of the total amount charged. The key is to pay providers quickly -- within 10 days of signing the agreement.
"The prompt pay resonates strongly with mid to small providers ... accelerated payment for them is very meaningful," Gaughan said.
Targeting smaller medical payments separates Mitchell from other companies that negotiate out-of-network medical charges for workers' comp payers, Gaughan said, although the company also focuses on the higher end facility bills.
"A $500 bill charge is an area where other competitors historically didn't play," Gaughan said. "About 80 percent of a payer's bills are under $5,000. We said, 'we'll take those. We'll do the accelerated payment method.' There is some competition for this bill segment, but most competitors do not offer the prompt pay model. It's very unique and attractive to payers."
Personal relationships are the basis on which the company negotiates, Gaughan said. The conversation between Mitchell's negotiators and providers is very non-adversarial.
"We don't call and argue about charges," he said. "[They will say to a provider,] 'I'm not going to argue about your bill, but I am going to pay it faster than you expect and in return ask for whatever percent discount.' Everyone feels happy when they hang up the phone. They don't feel they are getting hammered."
The process has led to Mitchell's NHQ being considered as part of the tiers of networks -- sometimes moving to second or third place after the primary network.
"You get past that primary network, and there is a lot of opportunity," Gaughan said. "We do better than many smaller and mid-sized PPOs."
As he explained, payers are continually shifting their order of PPO networks to obtain the best outcome. Because of the company's 22-year history of working with providers, the company can quickly identify which providers will be willing to negotiate a prompt pay discount and how much.
"We know the person to work with and what the person will do. There is a history there," he said. "Many providers can be old school and would rather do the phone call then go into a network. That's where the market is right now."
By Nancy Grover
Read more at the WorkersComp Forum homepage.
September 30, 2013
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