This document discusses secret provider agreements between payers and providers that prohibit self-funded health plans from directly communicating with providers about billing issues. It summarizes that: 1) Many payers rely on secret provider agreements that prohibit self-funded plans from contacting providers about billing questions or issues. 2) These secret agreements distort discounts, disguise settlements, lead to excess billings and payments, and hide fees, costing self-funded plans more money over time. 3) To regain control over costs, self-funded plans should demand transparency into claims data to identify high-billing providers, use comparative billing reports to find discrepancies, and work with payers willing to support direct communication with providers.

1. Presenter:
Si Nahra, Ph.D., President
September 26, 2013
Secret Provider Agreements:
Where They Came From.
Why They Must Go.

2. 222
About Health Decisions, Inc.
Pioneering Specialists in
Group Health Care
Post-Payment Administration
For Over 25 Years
Respect for Existing Procedures
Emphasis on Customization
Focus on Solutions
Customer Philosophy

3. Tale of Two Billings
Vendor Billings Provider Billings
Businesses pay thousands of bills from
hundreds of Vendors
Self-funded Plans pay thousands of bills from
hundreds of Providers
Accountant promises Businesses savings on
three conditions
Administrator promises Self-funded Plan
savings on three conditions
1. Business/Self-funded Plan must pay whatever bills the Accountant/Administrator submits.
2. Business/Self-funded Plan is prohibited from seeing the payment agreements
Accountant/Administrator has with the Vendor/Provider.
3. Business/Self-funded Plan is prohibited from contacting or communicating with the
Vendor/Provider about any billing questions or issues.
Business would laugh Accountant out of the
room right after they fired them.
Self-funded Plan accepts Administrator
conditions without question.
Secret Provider Agreements
Copyright Health Decisions, Inc. 9/2013
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4. Current Situation
PPOs are the dominant form of coverage for Self-Funded Plans
Many PPOs rely on “Secret” (I.e., proprietary) provider agreements.
Secret Provider Agreements
Copyright Health Decisions, Inc. 9/2013
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Person
Provider
SF Plan
Payer/PPO

5. What’s Missing
Self-funded Plans cannot contact or communicate with Providers.
Done contractually as part of agreement with Payer.
CHECK YOUR CONTRACTS TO SEE IF THIS IMPACTS YOU!
Secret Provider Agreements
Copyright Health Decisions, Inc. 9/2013
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Person
Provider
SF Plan
Payer/PPO

6. THIS WAS NOT ALWAYS SO
1993
Reprint from Corporate Detroit “Could Direct Contracting be Your
Firm’s Health Care RX?”
Reprint from Managing Health Care Benefits “The Direct Provider
Contracting Option”
Interview with Consumers Power on their experience with
direct contracting
Secret Provider Agreements
Copyright Health Decisions, Inc. 9/2013
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7. How Did This Happen?
• Employers and the Self-funded Plans they sponsor
hit the “Easy” button.
• Providers preferred fewer discussions.
• Payers needed Providers to have competitive
networks.
• Providers co-opted negotiations.
• Payers sided with Providers.
• Self-funded Plans signed agreements prohibiting
Provider contact.
Secret Provider Agreements Copyright
Health Decisions, Inc. 9/2013
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8. What Does it Mean?
Based on what we have seen:
• Distorted Discounts
• Disguised Settlements
• Excess Billings
• Excess Payments
• Hidden Fees
Secret Provider Agreements
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All getting worse.
Worse still is what we don’t know.

9. What to do?
Right Now:
• Fight for transparency.
– Demand claim records that identify providers and all payment
details.
• Ask questions and expect REAL answers from Payer about
– Evidence of unbundling, upcoding and excess billings (using
Medicare billing standards)
– Missed discounts between provider and PPO
– Unexplained cost increases (same provider, same procedure, same
plan)
• Confirm what Payer knows and what they are doing.
Secret Provider Agreements
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10. What to do?
To Regain Control
• Do what Medicare does: Comparative Billing Reports (CBR)
– Compare Providers.
– Find the few “bad apples”.
– Let them know you know who they are.
– Ask them to explain themselves.
– Harness the power of the “sentinel effect”.
• Demand Payers support your provider communications.
• Do not work with Payers who will not support your efforts.
– Payers protecting Providers over Plans are a Problem.
Secret Provider Agreements
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11. Other Resources
Health Decisions, Inc. Prior Webinars
• Provider Score Card: 5 Common Sense Tests to
Foster Competition (November 2010)
• Finding Provider Fraud (October 2011)
Medicare Program Integrity Manual
• Chapter 3: Verifying Potential Errors and Taking
Corrective Actions
– Section 3.7.2: Comparative Billing Reports (CBR)
Secret Provider Agreements
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9/2013
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Past Webinars Available
Recordings of past webinars are available upon request, including:
• August 2013 – What Happens After Open Enrollment (And Before Obamacare)?
• July 2013 – The Claims You Should Be Auditing, but Aren’t
• June 2013 – Obamacare Compliance – How it Helps Self-funded Plans
• Mid-June 2013 – Employer Mandate Calculations Explained
• May 2013 – Pay or Play: A Bigger Challenge for TPAs than for Plans
• April 2013 - The Most Overlooked Part of Health Reform: Enrollee Communications
• March 2013 – Why Cost Sharing is not Working
• February 2013 – Loss of Fiduciary Control
• January 2013 – Top 10 Do’s and Don'ts of Data Warehousing
• December 2012 – Union Trusts: Health Reforms Most Overlooked Winner?
• November 2012 – Year-end Renewal and Bidding: Opportunities for Control and Savings
• October 2012 – The 5 Most Important Things an Effective Dependent Audit Should Include
• September 2012 – Old Question, New Twist: Is Self-funding Right for Your Group Health Plan?
For more information, please visit www.healthdecisions.com

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For More Information
Contact
si@healthdecisions.com
734-451-2230
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