Another common form of provider discount abuse is “PPO network stacking” or “cherry picking.”  It is a variation on the silent PPO theme, but with insidious, yet clever, twist.

In order to form relationships with multiple payers, providers typically enter into several different PPO arrangements, usually with both regional and national PPOs.  Correspondingly, payers enter into arrangements with multiple PPOs to best satisfy the particular needs of their plan sponsor clients.  PPO network stacking occurs when a payer (usually through a PPO aggregator) contracts with several PPOs in the same geographic area in order to have the ability to select or “cherry pick” from multiple PPO contracts for the lowest discounted rate.  PPO stacking also occurs when a payer submits or “shops” a claim from a particular provider to multiple PPOs in search of the greatest savings or systematically tiers or “stacks” the PPO network arrangements for a particular provider to identify the lowest reimbursement rate.  Once the PPO arrangement with the lowest provider reimbursement amount is identified, the largest discount is then applied and the claim is paid per the PPO contracted rate.

Here again, the payer pays less, the PPO aggregator earns a fee (e.g., a percentage of the “savings”), and the provider has involuntarily granted access to discounts without any corresponding benefit.