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Tips for Getting Paid According to UCR

Guest Article By:  John A. Mills, Esq.*

There are a variety of reasons why physicians decide not to contract, or renew their contract, with health plans.  For many, a reason to give up the benefit of patient “steerage” that comes with participating in a plan’s network is that the contractual rates for reimbursement are unfeasibly low.  However, when physicians begin treating the plan’s members as an “out-of-network” provider, they often find that the plan’s reimbursement amount is not much higher, and may be even lower, than the plan’s contract rates.  If you are seeing that trend in your practice, then it’s possible you are overlooking a few key steps that may help you get paid the amount you’re owed.

1.     Understand UCR.  It’s important to keep in mind that the amount you’re owed is not necessarily the amount you actually charge.  As an out-of-network physician in California, you should be getting paid, at a minimum, the “usual, customary and reasonable” amount for your professional services, commonly referred to as the “UCR” amount.  UCR essentially means the fee that a physician usually charges for a service that is within the range of usual fees charged for that service by other physicians in the same or similar geographic area, and which is justifiable in light of the particular case in question.  There are a number of resources to help with determining fee schedules, including FAIR Health (www.fairhealth.org).

2.     Conduct a thorough verification of your patient’s health insurance benefits.  Except in the case of emergency care (where the service must be provided irrespective of the patient’s ability to pay), the patient’s insurance benefits should always be verified in advance of rendering your services.  This is your opportunity to get a breakdown of the patient’s insurance coverage.  The patient’s plan should be asked to provide detailed information about the patient’s out-of-network benefits coverage, including such things as confirmation of the effective dates of coverage; the amount of the patient’s co-insurance, deductibles, co-pays, out-of-pocket maximums, as well as the amounts met for each; and whether the plan requires prior authorizations.  It is extremely important to find out whether the plan pays out-of-network benefits according to a UCR rate.  Do not assume that it does.  The plan’s representative will often say that the plan covers a particular percent (e.g., “70%”), but it is necessary to ask “70% of what?”  If the response is “70% of the plan’s allowable charge,” then it’s important to verify that the so-called “allowable charge” correlates to UCR.  Because not all plans are required to pay out-of-network benefits according to UCR, some may define “allowable charge” as being the equivalent of Medicare rates or in-network rates, which can translate into awfully low reimbursement.  Finally, it is absolutely imperative that your verification of benefits be carefully documented, as it often proves to be crucial evidence when disputes later arise.

3.     Make sure you have a comprehensive assignment of benefits form.  Taking an “assignment of benefits” from the patient means that you are acquiring the right to receive the patient’s benefits from the health plan.  (Note that some health plans refuse to honor assignment of benefits, and insist on sending benefits checks only to the patient. This is a hotly-debated topic which is outside the scope of this article.)  In the event you have a reimbursement dispute with the patient’s plan, it’s important that your assignment of benefits form is broadly worded.  You do not want to just have the right to receive the benefits money; you also want to have all the other rights the patient has under the plan, including the right to directly appeal an adverse benefit determination.

4.     Aggressively appeal adverse benefit determinations.  Claims that are denied or underpaid should be timely appealed to every level of appeal that the plan offers.  As part of your appeals, be sure to request the documentation which the plan used for reaching its decision.  Some plans are subject to penalties if they refuse to provide you with the documents.  Also ask for an explanation of how it calculated the reimbursement for your services.  If you can do so, enlist your patient’s assistance in the appeal process.

5.     Be cautious about waiving co-pays and giving discounts.  Some out-of-network providers seek to attract patients by agreeing to waive co-pays and deductibles.  Health insurers are increasingly refusing to reimburse practices that do this, on the grounds that “fee-forgiving” is contrary to the patient’s insurance contract and, in some cases, is fraudulent.  An experienced health care attorney can help you ensure that your efforts to minimize your patient’s financial burden will not jeopardize your practice.                                   

John A. Mills is an attorney with the law firm Fenton Nelson, where he regularly advises physicians on a variety of regulatory matters, including telemedicine, medical staff and peer review, reimbursement and licensure. For more information about UCR reimbursement or other issues, contact him at jmills@fentonnelson.com or through Fenton Nelson’s website:  www.fentonnelson.com.