The video replay of our free webinar on Preferred Provider Organization (PPO) discounts is now available to stream! The webinar slide deck is also available to download.

In this lesson, we shared bill examples from California practices illustrating the (arguably pointless) revenue loss caused by PPO agreements. But just as importantly, we explored the obvious question: why would a provider sign a PPO contract?

The answer we hear most often is that providers sign PPO contracts for fear of exclusion from Medical Provider Networks (MPNs), and potential loss of patients as a result. But as the webinar reveals, the threat of MPN exclusion is likely a hollow one.

In fact, in this post we share the gory story of a provider who reached out after the webinar, afraid of being booted from an MPN for daring to negotiate PPO reimbursement rates upward with Coventry.

Our research revealed that the Coventry network may have no legal right whatsoever to restrict any California employer or insurer’s workers from visiting the practice.

Below, see this provider’s story, and access the webinar video and slides free of charge.

Stream video and download slides (free): PPO Plunder

PPOs & MPNs: Driving Doctors From Workers’ Comp

In the webinar, we shared multiple examples of wildly varying reimbursement rates under PPO contracts, even for identical bills sent from the same provider, to the same claims administrator, for the same service.

Most disturbingly, reimbursement rates for common procedure codes were reduced to below Medicare rates — despite the fact that Official Medical Fee Schedule (OMFS) rates were pegged at roughly 134% of Medicare rates for the dates of service in question.

For example, below see the PPO reimbursement rates for CPT code 99214, a bread-and-butter code for Evaluation and Management (E/M) services.

At $191.01 per the OMFS for the date and location, payments after PPO discounts ranged from just $91.08 to $119.31 (48% to 62% OMFS). Those payments equaled between 64% and 83% of the Medicare rate of $142.31.

Is MPN Membership Really Worth It?

Over and over, before, during, and after the webinar, we heard the same refrain from providers: “If we refuse to participate in PPOs, we’ll be dropped from the employer/insurer’s MPN. We will lose patients.”

Yet it’s often the case that PPO discounts cannot be traced to membership in any employer or insurer MPN. None of the PPO discounts from the example bills featured in the webinar were linked to MPNs maintained or utilized by the employer or insurer.

Following the webinar, we received the message below from a distraught provider who wished to renegotiate the terms of their PPO contract — but was met with demands by Coventry to accept even lower rates.

This provider is now fearful to engage further, and risk being booted from Coventry’s network.

We checked the Division of Workers’ Compensation (DWC) MPN list to see which California insurers or self-insured employers utilize Coventry’s MPN.

Bear in mind that California Labor Code gives the employer or insurer the exclusive right to determine which providers are in their network. As it happens, every single Coventry MPN for which the MPN applicant is an insurer or employer was withdrawn or terminated.

The only approved Coventry MPNs list the applicant as an “Entity that provides physician network services” — in other words, an entity with no legal right to dictate which providers are in the employer or insurer’s network. For that reason, we call these “entity”-run MPNs “Mirage Provider Networks.”

So we dare to ask: what’s the real value of MPN membership for providers? Is it worth accepting less than Medicare rates for treating injured workers? This is a question every California provider should ask themselves before signing potentially disastrous PPO contracts.

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