Last month, we presented a “crash course” option on tracking the PPO/Network affiliation in your system by recording certain data elements after receiving an EOB. This month, we further explore the difference between a PPO and a Payor “client”, why it is important to track these different elements, and why the EOB is your most accurate resource for PPO network data. (Part 1 can be found in the January 2007 Newsletter).

The Difference Between a PPO and a Payor:
For purposes of this and future articles, the following words will typically mean:

• PPO: a company which builds a network of providers who agree to take a discount in exchange for marketing of their services to various employers and other clients to increase referrals.
• PAYOR: an insurance carrier, employer, TPA or other administrator who pays the claim according to a discount which has been arranged either by themselves or by a PPO.

NOTE: Sometimes the payor and the PPO are one and the same (e.g. PacifiCare, UHC, Blue Cross, etc. all actually pay the claims, and they have also directly built their own provider networks)

Why It Is Important to Track These Different Elements:
Most providers are well aware that they received a check from a company such as Fortis or Zenith Administrators or Gallagher Bassett, but rarely do they track that Fortis paid their claim according to the PHCS fee schedule, Zenith paid according to Beech Street, and Gallagher Bassett paid according to First Health.

PHCS, Beech Street & First Health did not “cut the check”, but they determined the amount to be paid (based on the fee schedule the therapist accepted). If you don’t connect Fortis to PHCS in your system somewhere, how do you know if they paid you correctly?

TIDBIT: Most of your PREFERRED contracts are non-risk PPOs. The majority of them DO NOT pay claims, but they represent an extensive list of "clients" who DO pay claims.

Why the EOB Is the Most Accurate Resource:
In today’s convoluted healthcare environment of mergers & acquisitions, leasing and subleasing of network access, and cross-pollonization between PPO service options, the EOB is the ultimate guide to how your claim was paid.

Why not the card?:
The patient’s benefit card may have multiple PPO logos on it. Their employer might access Interplan as long as they seek treatment in California, but if the patient is traveling out of state, their “out of area” coverage might be provided by PHCS. In some cases, PPOs “lease” other PPOs for coverage that is out of their service area. In other cases, a large employer might use Interplan for their employees in California, PHCS for their employees in Massachusetts, and Beech Street for their employees in Texas.

TIDBIT: Although a patient’s benefit card should indicate any PPO network affiliation, there may be multiple PPO network affiliations, depending on where the patient lives or works, or if the patient travels out of their primary PPO’s service area.

Part 3 of THE MISSING LINK will be in the March Newsletter.