Those who know me, know that I’ve been “insurance-free” for my whole career. My practice has been truly FFS (fee for service) for its entire history. I can tell you, that it has NOT been easy. But, when I observed the struggles of my insurance-based colleagues, it hasn’t been easy for them, either.
My friends deal with the vagaries of deeply discounted fees, rejected claims, lost claims, delayed payments, denied payments, down-coding, and demanding patients who expect them to know the intricacies of dozens or hundreds of plans, and so on.
My challenge has been to attract patients who choose to come to my office because of the level of the service we provide rather than where their “insurance booklet” tells them to go.
Maybe I’m an idiot?
But, times have been tough. I have a lot of empty chair time. While my goal has never been to simply “be busy,” it’s natural to get worried when things are slow. And, as time has gone on, it seems people (patients) care less and less about quality of service and more about low cost and “does my insurance cover this?” There have been times where I doubt myself and think, “maybe I’m an idiot and should join some plans?”
OK, maybe I should look into it?
Last month I decided to at least look into it. I figured I’d at least get some information from one or two insurance companies about their PPOs. I started with Cigna. I had my office manager give them a call and ask for some information to be emailed to me. They promptly accommodated that request and emailed me a fee schedule.
I exported my fee schedule from my practice management software into an Excel spreadsheet. Then I took Cigna’s fee schedule home with me and had my wife dictate the fees to every single code to me, as I input them into another column in the spreadsheet. I then created another column with a formula to calculate the percentage discount for each fee.
You can click on the spreadsheet image below to see it in a larger format in a new window. You can see three “Cigna” columns, each representing the successive fee schedule offers. I have blurred out my fees and Cigna’s fees, as they are confidential. But, you can see the percentage discounts, which is the point of posting the spreadsheet.
At the bottom of each column, I totaled the fees to make an “aggregate fee” to give me an overall picture of the discount.
Ay, ay, ay! The PPO fees were DEEPLY discounted… 30 – 70%, averaging around 50%! See the column marked, “Cigna Fee 1” above. Yeah, that’s not going to work for me. I had learned that insurance companies will negotiate fee schedules a fair bit BEFORE you sign. So, let the negotiations begin!
I don’t want to be busy LOSING money!
I shot an email back saying that those fees won’t work, and it was suggested that I submit my “Top 25” utilized codes and related fees to the insco. So, I did. Lo and behold, they sent me a new fee schedule with fees substantially improved for those “Top 25” procedures. They went from an average of a 41% discount (not doable) to a 20% discount (perhaps doable!). See column labeled, “Cigna Fee 2” above. Right off the bat, they improved the fees by about 50%! I was told in the insco rep’s email that I had 30 days to make a decision. I pretty much ignored it as a “standard” statement.
But, then I looked at the OTHER fees (outside the Top 25) and was disappointed. They only improved by about 4% to an average of 49%. So, I picked out 10 additional significant codes that, while not my top procedures, would add up to a substantial amount if I discounted them by 49% (not doable). While the Top 25 are the “head,” there is a “long tail” of procedures that, together, add up to a significant part of the practice revenue. Discounting the “long tail” by 49% is giving up a LOT!
I fired another email back and attached my spreadsheet with the “Extra 10 Codes” included. I expressed my concerns as I described in the paragraph above.
The Cigna rep sent back a third fee schedule proposal. See the column labeled, “Cigna Fee 3” in the spreadsheet above. Here’s where it gets a bit funny, because by now they should know they’re not dealing with an idiot. 🙂 I plugged the new numbers into my spreadsheet, and some of the Top 25 fees went back DOWN! They raised the “Extra 10” fees a bit: another 4%. But, they reduced the aggregate fees of the Top 25 by 3%! LOL!
Sure…. we’ll raise those other fees a bit, but we’re going to lower some of the Top 25 fees!
The overall discount came to about 35%. Still a no-go for me.
I wrote back again, expressing my newest concerns, including in so many words, “I see what you did there!” LOL!
Call me maybe?
The rep tried to get me on the phone to “discuss.” But, I would rather get the entire conversation in writing (documented in emails). I sent another email asking if there was anything else we could do. She wrote back (yesterday) that the “custom” schedule had a 30-day expiration, and that 30 days was up on August 8 (tomorrow)!
Must buy now! Prices will never be better!
I was expected to make a major business decision by tomorrow! Well, that shit doesn’t fly with me. It’s like the car salesman telling you, “That price is good only for today. Tomorrow it goes up.” It’s a pressure tactic, and an obvious one at that. And, it really made my decision easy.
With tomorrow’s deadline looming, I sent this email today:
So, I have one more day to make a decision? A major business decision? I can’t help but be amused by the imposition of a deadline, which is obviously a pressure tactic. That you would resort to such measures tells me that the low fee schedule might be the least of my problems should I sign a contract with you.
I don’t suffer such tactics well. At the very least, this should be a mutually beneficial arrangement. But, you throw down the ultimatum – join now or else? I have no choice but to choose “else.”
So, I guess this is where we part ways.
Have a nice day.
It will be interesting if I hear back! If I do, I’ll update this article. In any case, they showed their true colors, and I don’t see myself joining the Dark Side. But, at least I gave it an earnest look. I’ll have to find other ways to fill empty chair time.
PS… If you need help in analyzing PPOs or improving your existing situation with PPOs, look to these experts: Unlock the PPO!