Blog, Chirosecure Live Event March 4, 2024

Chiropractic Malpractice Insurance – Are You Ready to Request A PPO Rate Increase?

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Hi everyone, this is Sam Collins, the coding and billing expert for ChiroPractic, ChiroSecure, and H. J. Ross, but most importantly, you. One of the issues I get asked to me all the time, we do seminars, I consult offices, they’re always asking, Hey, what’s going on with the PPO rates? I’ve been part of ASH, I’ve been part of Optum, all these plans.

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And I’ve never gotten a raise. Is there anything that I can do to get a rate increase? Well, let’s talk about that because certainly that can be pretty stagnant and be a practice killer if you’re getting paid the same rates for a long time. So let’s go to the slides. Let me give you a little primer on what to do because there is something you should be doing to help increase PPO rates.

The first thing you have to do is kind of create a value proposition, if you will. You’ve got to start to really look at, how do I present my office in a way that they will start to understand the value of my services and can compensate us in that way. So I want you to write a unique value proposition that makes your practice stand out.

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Not just because I’ve been in it a long time and you’ve got to increase my rates for cost of living. Though that should be part of it, that’s not going to be the only thing. Let’s remember, the insurance company kind of has the upper hand on us because they might say to you, Well, look, we already have 25 providers.

If you want to drop out, no big deal. We want to show that we have a unique value within the plan. What I would first look at is what is your tier status? Like by example, if you’re with ASH. Are you a Tier 6? That certainly gives you more leverage because you’re considered one of their upper level providers.

One that they don’t have to monitor, one that is doing the right thing. So, that’s something to point out is your status within that plan, how long have you been there. Your status has been rising, particularly Tier 6. I want you to look at also though, writing up how many visit average you do. This is something to look at.

If you’re a Tier 6 or a high level, they’re expecting that you’re a provider that does not overutilize. You’re not doing things that cause the practices to stand out, meaning treating everyone 50 visits, if you will. So you’re showing, hey, I’ve got an average number that’s reasonable. What is that number?

Typically around 8. Now keep in mind when I say, oh my god, Sam, 8. Well, bear in mind, you’re going to have some patients you will see 20 times. They’ve got a problem that does require it. However. That balances with patients that also need just one or two visits. So therefore, the average comes in there. And of course, a little bit based on diagnosis, but show that you get the protocol.

The whole idea here is to give the patients the best value care, not over utilization or maintenance. And always consider, what are the number of providers in the region? If you’re in a very saturated area, Obviously this doesn’t help much, but you might point out your status in the area for the patients, the patients that come to you.

But certainly if you’re in a more rural or an area that is somewhat underserved, that is going to help. And then I want you to also start to think of what are they paying and how does this work with existing contracts? I want you to look at some existing contracts to show them, hey, you’re really undervalued.

By example, many chiropractors who are with American Specialty Health are getting paid the same rates they’ve been paid since the nineties. Simply because they’ve just never raised them. And if you think of it, that rate of 26 is not even Medicare rates. So when you have a PPO that is below Medicare, I think to myself, give me a break.

Medicare is that mandated fee, which is definitely low and should not be anywhere near a reasonable fee, but it’s considered kind of that mandate. So I would use that. I would also use workers compensation for that matter. Workers comp in some states can be quite high. In Texas, that rate is almost double Medicare.

In other states, probably 150%. And so you want to start to use that to show that in order for a practice to be viable, it has to be make a profit. We’re not saying we need to gouge anyone, but we certainly have to be able to say if it costs us 30 to treat a patient, we can’t make 30 on the visit and remain open.

So, you want to bring in when you’re writing this letter to them, if you will, in this proposal, all of these factors. And, of course, inflation. I mean, let’s face it, every year inflation has gone up. Everyone who works for the insurance company, I’m pretty sure, has gotten a raise over time. When’s the raises for the doctors?

And remember, your cost of practice, your cost of practice over time has certainly increased. So we want to kind of use these six things to kind of set yourself up to make a request. This request is going to be in writing, send it to Provider Relations, and you want to make sure to put out your unique value proposition, meaning Your value within the community, the number of patients, I would certainly love for you to add in there any type of testimonial or information from a patient about how you were able to help them.

Not, not overdoing that, but doing a few certainly would be helpful because obviously an insurance company is there to satisfy their insurance. And if you’re a provider that does that, obviously you’re a more valued provider. So one of the ways I would frame this is starting to think of it in a way of how would I frame a letter.

So here’s kind of a suggestion. You might point out, I’ve been a panel provider since 1999. Some of you are going to have been that long. And you’re going to point out, I support the development of managed care in chiropractic because I think it helps do standardized documentation, promote evidence based care, and greater accessibility.

We do realize we have to partner with that, and I get that. We do want to help to standardize to make sure that everyone’s getting good care and getting the results that are expected. I’m all in. My concern is, in doing that, why are we getting paid the same amount of money for these number of years when there’s all the cost increases?

So we’re showing we’re a partner. We get it. Like, by example, I don’t think a lot of the managed care plans are necessarily evil, as some of us like to think. The only thing I think that’s wrong with them, They just simply don’t pay enough to sustain a practice. That’s really the case. Now, would I love for them to pay, you know, hundreds of dollars a visit?

Well, of course. But let’s be reasonable. Should they be paying a fair fee per visit? Certainly 26 is not going to cut it. And you’ll then point out there has been no significant change in the reimbursement for your plan. And I’ve been a member for decades or 10 years, whatever it is. These days, you have increased staff salaries.

Increased rent. We have to do multiple computers, electronic records. I mean, look at some of these places are requiring electronic billing. You have to do the internet connections, software contracts, multiple consultants to keep that because you have to maintain security. Think of the increased costs just from that, not to mention cost of living.

You’ll point out my overhead is nearly four times what it was when I enrolled with you. My average cost of seeing a patient is approximately 41 a visit. Imagine if your practice. Is costing 41 a visit when you count all your overhead? Think about it. What is that overhead? Your rent, phone, internet, staff, everything that runs the practice, cleaning service, all of that.

If you’re getting 41, well, wait a minute. If that’s the cost and the reimbursement is 26 to 40, And that includes copayment? That’s business suicide. Can you imagine? Oh sure, I’m going to have a business that’s costing me 41 a service and I’m getting paid 40. How long do you think you’re going to stay open?

Well, not long. So you’re going to point out this level of reimbursement is not a sustainable model and while being on the plan may create a greater volume of patients, there’s a limitation to services that can be delivered in a day, which makes it a moot point. I mean, let’s face it, you can always think of, oh good, I’ve got an increase in patients, but how many people can you see per hour?

At some point, that’s finite. Therefore, that really doesn’t matter. There’s got to be some sort of increase. You’ll point out, I note the rates for your insurance plan have increased to allow the plan to remain solvent and provide services that are reasonable. Like everything, do they not make raises on these insurance premiums every year?

Now, if you think of it, why do they state that? Oh, because of the increased cost of health care. Okay, I’ll go with that, except here’s what I would point out. For chiropractic, has there been an increase in result of health care? If they’re paying us the same rate for the last 10 years, Explain to me where the increase in rate is coming from.

Now, if you want to talk drug usage or medical services, maybe that’s different, and I will tell you not even medical providers are getting paid more. Maybe it’s the drugs, that part I’ll give them, but what does that have to do with us? If your rates have come up, it’s not because of the providers. It says here providers are not part of the increased overhead due to the flat allowances that providers have had for many years.

It’s unreasonable to assume providers must bear the increased costs with no consideration while the plan has increased their premiums and adjustments and pay to the employees of the plan. Everyone who works for the plan gets two to three percent a year. Where are we supposed to go? I mean, at some point, if you’re getting paid the same thing Just looking at the cost of gas to go back and forth to work today is going to be unsustainable.

And further, you’ll point out, in my observation, providers of healthcare services are a cornerstone of the business and have been left out. I’m requesting you increase my per diem reimbursement be raised by a set number of dollars or percentage. This will allow me to continue to welcome these patients to my office for now and the future.

Without an increase, it will require that I no longer may sustain this relationship as it is a sub negative. As would be the same for you. If your costs were greater, we’re trying to just point some logic here. And while I’m not expecting they’re going to double our rates, would it be unreasonable to think a 10, 20%, if you haven’t had a raise in a while?

And frankly, I wonder why are we not getting three to 5 percent a year? And if not, maybe we don’t want to be part of this. And this to me also brings up the greater solution to this, which is. You’re not going to maintain relationships that are non sustainable. Don’t be afraid to drop out of these plans.

It’s often interesting to me when providers have dropped out that they wind up wanting it worked out better. I had an example last week, and this is not an exaggeration. I had an office that indicated he dropped out of a certain plan. He goes, Sam, immediately I lost 30 percent of my patient volume. He goes, what was funny though, it only equaled 6 percent of the revenue.

So he realized that was a lot of work for nothing. He goes, over time, my practice transitioned and grew because I de emphasized that. Often think, what if I’m doing and getting appointments for patients that pay below my cost and that appointment visit is not available to someone who will pay higher, even my cash rate.

Let’s face it, if I’ve got an insurance that’s not really paying my cash rate, Is that really reasonable? Because if you think of it, your cash rate is often your lowest rate possible. And while I’ll forgive a little bit for maybe an increased volume, at some point increased volume is not going to do the trick.

Don’t be afraid to really look long and hard with these PPOs. Do request an increase, and if they refuse, Maybe that’s when it’s time for us to break that relationship. As always, H. J. Ross is your partner, as is ChiroSecure. Seek out help with us. I can help you write a letter like this. We can help you make that value proposition.

I really wish you well, my friends. Best wishes.

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