A California provider narrowly avoided financial pain when their office signed (but thankfully never delivered) a reimbursement discount agreement PhysNet sent to the practice.

The PhysNet agreement offered to pay the provider:

• 60% of the state fee schedule rate, or
• A maximum of $80 per visit

Fortunately, this was a daisyCollect client. Our agents stepped in and advised the practice to send the agreement to its rightful destination: the nearest landfill. If your office receives a PhysNet discount proposal like the one below, do not sign.

PhysNet’s “single case agreement” purports to apply only to chiropractic services for one injured worker where Broadspire is the designated claims administrator. Even more alarming than the reduced payment, the contract seems to stipulate that PhysNet assumes Broadspire's responsibilities as claims administrator.

The agreement demands that the provider “coordinate” with PhysNet regarding “All aspects of this Patient’s claim [emphasis added],” including authorizing care and referring only to PhysNet-approved providers.

While providers should never accept PhysNet discounts, PhysNet’s apparent attempt to usurp Broadspire’s role as the designated claims administrator is even more disquieting.

How can this be legal?

PhysNet Offers $80 Daily Cap

PhysNet is not the injured workers’ claims administrator, but a “network payer” that interposes itself between providers and claims administrators in the hopes of taking a cut of reimbursement.

Most importantly, in exchange for absolutely no care for an injured worker, PhysNet takes a slice of an employer’s workers’ comp premiums.

In exchange for absolutely no incentive or benefit to the practice, PhysNet offered to pay the provider one of three rates for the injured worker’s treatment, whichever is lowest:

• 60% state fee schedule (equal to 91% of the Medicare rate), or
• $80 maximum per visit, or
• 100% of the provider’s billed charges

In effect, the terms are simple: PhysNet will never pay more than $80 for any care provided to an injured worker.

Additionally, the agreement lists a host of services PhysNet will never pay any amount of money for, including Range of Motion Testing, Hot or Cold Packs, and more.  

PhysNet Assumes Complete Control Over Care?

PhysNet appears to assert total control over every aspect of the injured worker’s care, from authorization and scheduling to billing and discharge, requiring the provider to “coordinate” every action directly with PhysNet.

Broadspire, not PhysNet, is the designated claims administrator for this injury.

PhysNet is a network, not an actual approved claims administrator in the state of California (e.g., an insurer, Third-Party Administrator (TPA), or self-insured employer responsible for managing injury claims).

So, it’s worth asking: does PhysNet have any legal right to assume this level of control over an injured worker’s care?

PhysNet Overwrites State Billing Laws & Regulations?

As if eliminating common services and imposing an $80 cap weren’t bad enough, the agreement also claims to supersede state laws and regulations governing workers' compensation billing.

According to the agreement, the provider must bill for the injured worker’s initial evaluation within 48 hours and provide “notes” with every bill in accordance with PhysNet standards.

Never mind that California gives providers 12 months to submit bills and already outlines standardized reporting duties; PhysNet has its own rules.

A Close Call

As we continue to warn providers following similarly ridiculous “offers” from ESIS and The Zenith, there is no rational reason or obligation to sign onto these financially damaging agreements.

In this case, however, the practice almost went for it.

The provider signed, but before returning the agreement to PhysNet, the practice wisely shared it with daisyCollect. After our agents picked themselves up from the floor and wiped the tears of despair from their eyes, they promptly advised the provider not to give revenue away for nothing.

Providers, always approach unsolicited discount “offers” with the utmost skepticism.

We have never seen a discount offer that actually offered mutual benefits to both parties. Instruct staff to treat these offers like any other spam, especially from interlopers like PhysNet.

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