The proliferation of provider discount abuse, and the sheer magnitude of the dollars involved, have caused providers to be much more aggressive in their efforts to combat such practices. Coupled with the consolidation occurring in the medical industry, which bolsters their local negotiating strength, and recent advances in data processing technology, many large hospitals, lab and radiology enterprises, physician groups and other provider entities have become increasingly more aware, and less tolerant, of these unlawful and unethical practices.  The following are examples of how providers are fighting back:

Legislation
As noted above, dozens of states have, or are, enacting laws against provider abuse.  According to several government regulators, the ability to continue these practices is likely to be short lived.

Lawsuits
Understanding that it is virtually impossible to defend against such practices, providers are looking to the courts as a remedy for provider abuse…and winning.  Hundreds of provider groups have hired law firms to litigate against providers who take unjustified discounts.  As expected, the nation’s largest and most prestigious law firms (e.g., Gardner, Carton & Douglas; Morris, Manning & Martin; Latham & Watkins) have developed a capability to effectively litigate these cases.  As a result, more and more U.S. courts are hearing cases brought against insurers, TPAs, HMOs, and other payers who are improperly taking discounts from providers.  On the federal level, the U.S. Supreme Court recently approved a class action suit for treble damages under RICO for concealing discounts.

Specialty Auditing and Revenue Recovery Services
Receivables auditing and other revenue recovery services have been available for years.  Few firms, however, focused on silent PPO and PPO network stacking schemes as a source of revenue recovery.  Until recently, provider discount abuse went undetected, as few providers had the ability to review EOBs and payments to identify those not eligible for discounts.  They also had to combat payer EOB codes designed to deceive the provider by indicating that “payment is based on a PPO contract with the ABC PPO Network.”  At best, this is lying by omission.  It is more likely fraud.

With the advent of sophisticated data collection and analysis tools, companies have emerged that not only focus specifically on these forms of provider abuse, but also target large and small facilities, labs, radiology practices and physician groups.  These firms train their clients’ personnel to identify silent PPO use at the point of care; re-engineer their patient record and accounting systems to identify and monitor silent PPO use; and perform periodic payment audits to assist in recovering unjustified discount dollars --  all on a contingent basis.  Experts predict that the market for such services will grow exponentially over the next few years, as the savings achieved are huge.

Proactive Contract Enforcement, Re-Negotiation and Network Consolidation
Guided by lawyers and revenue recovery specialists, providers are identifying problematic contract language and renegotiating their contracts to ensure that they specifically prohibit silent PPO use and PPO network stacking.  Large regional hospital and physician groups are punishing PPOs that have engaged in these practices by terminating their contracts.

Point-of-Care Challenges
Able to identify patients with accounts that indicate payments by multiple PPOs, providers have begun to refuse treatment without advanced payment or a pledge to be paid on their UCR fee.