The expansion of provider contracting over the last two decades has resulted in the proliferation of PPO networks.  Unfortunately, however, in recent years, many payers have contracted with third parties that are engaged in techniques that damage and erode the effectiveness of legitimate PPOs, while neither promoting quality healthcare nor increasing patient volume.  Enter the “PPO aggregator.”

PPO aggregators exist because many PPO provider contracts contain very broad and purposefully vague language.  Capitalizing on this, some PPOs believe that they have the right to claim virtually unlimited access to the discounts offered by their participating providers, even if the patient does not access the provider through the PPO network.  A PPO aggregator is an entity that contracts with multiple PPOs for the purpose of leasing or re-selling access to these PPOs to payers.  Typically, the PPOs do not have a direct contract, or even a business relationship, with either the PPO aggregator or the payer.  While these lease/re-sell arrangements are agreed upon in advance between the PPO aggregator and the payer, they are often not openly communicated to the PPO’s providers.  The fact is that most providers are not aware that their services may be accessed by non-PPO participants and often, a provider unwittingly allows a patient to obtain services at the provider’s discounted rate even though the provider is not really a preferred provider in the payer’s network.

The services of a PPO aggregator are generally employed not as a source of access to primary PPO networks, but more as a source of accessing providers who are not apart of the payer’s primary PPO networks (but who are in the local area).  In other words, payers, in an effort to discount as many of the claims submitted to them as possible, contract with a PPO aggregator to “catch” the claims that are incurred for services rendered by providers who are out of the participant’s primary PPO network.  Unable to collect traditional PEPM access fees, PPO aggregators usually charge for their services on a contingent basis, billing the client a percentage of the claims savings realized by using their services.