Working in the medical field is challenging.  If you are a doctor, you went to medical school.  You likely racked up heavy student debt.  After completing the residency, you started your practice.  Starting a business is not easy.  There are ongoing day-to-day business decisions that require your attention.  Added to that are the additional issues of rising business costs, overwhelmed employees, an ever-changing political climate, and trying to find time to spend with your family.  However, one of the biggest issues affecting your bottom line is dealing with insurance carriers.  For most, the complexity in submitting accurate and correct claims increases every day.

When you finally get a claim submitted, it seems the battle has just begun.  Whether you are in-network or out-of-network, the insurers always try to find a way to devalue your claim.  They come up with a variety of reasons.  Maybe a certain field was not accurate.  Maybe the time it took to file the claim is pushing their limits.  Maybe you are out-of-network and they just do not want to pay your bill charges.  So what do they do?

Insurers will always try to find a way to devalue your claim.
Insurers hire professional “Cost Management Vendors” (CMVs).

Large insurers and third party administers (TPAs) hire professional cost management vendors (CMVs).  These CMVs have invested millions of dollars and resources in figuring out how best to “devalue” your claim.  They are trying to pay you less money than what you have billed.  By using loopholes, usual and customary rates, and other strategies, they then offer settlement requests in an attempt to have you agree to take a lesser amount.  Their goal…have you accept the minimum amount for your claim, sometimes even lower than what Medicare pays.  Why do they do it?

CMVs are in business to make money, just like everyone else.  How are they paid?  Let’s say a certain procedure bills at $10,000.  A CMV offers a settlement agreement and tries to negotiate with you or your office.  They offer a very small reimbursement of $675, as an example.  You try to negotiate the amount yourself.  Ultimately, you end up accepting an offer of $1,500.  The CMV is paid a commission on the difference:  $10,000 – $1,500 = $8,500.  Multiply that by a certain percentage of anywhere between 10 to 25 percent, and you can see how this adds up very quickly.  The insurance carriers are happy to pay that commission since this is far less than what was billed.

Cost Management Vendors are paid commission on the difference between what you bill, and what the carrier pays.

On top of all that, when you sign the settlement agreement you agree that you will not balance bill the patient.  This means that you cannot invoice the patient for the difference from what was billed and what was agreed to be accepted as final payment.  In the end, the insurance carriers keep their money (from the high premiums), the CMVs make lots of money, and YOU LOSE.