A TPA began to utilize The Phia Group’s “Phia Unwrapped” service in order to help control exposure for out of area insurance claims. Previously, one health plan administered by this TPA offered no out of area insurance coverage, due to exposure that was faced in the past. The plan, however, desired to take better care of its employees and provide options aside from their narrow network – so the plan elected to utilize Phia Unwrapped and chose 150% of Medicare as it allowable amount, in an attempt to ensure that providers were paid only what the plan determined to be reasonable and customary healthcare fees.
One claim in particular was billed at what the provider proclaimed to be its own usual and reasonable fees, but was over 1,500% of the Medicare allowable. Furthermore, the provider proclaimed that it had a standing policy of refusing to engage in any health care direct contracting. The Phia Group, however, leveraged certain factors such as the provider’s reported cost-to-charge ratio in an attempt to demonstrate that the billing was egregious, and that the payment tendered by this self funded health plan was reasonable and constituted the plan’s own usual and customary fees. Ultimately, the provider agreed to accept an additional 40% of the Medicare allowable to settle the claim – along with a stipulation that the agreement would remain confidential.
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