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Replying to Thread: contested PPO reduction.
Created On Friday 26, September, 2008 9:19 AM by ROBINHOOD

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Friday September 26, 2008 9:19 AM

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WHEN a chiropractic medical treatment explanation of benefits ( EOB ) withholds a PPO reduction, is penalty and interest ( P and I ) due it ? Is that for the unpaid PPO amount ? Is it P and I on the the whole amount less what was paid ? Is it P and I on the PPO reduction only ? understand that the doctor sent 3 letter to the PPO net works asking to be removed from the net work. The PPO did not send any patients to the doctor. The first 2 cancellation letters were sent in 1997 . the treatment is from 2000 to 2007. most (90 %) of the treatment was paid for. The last EOB was paid per the fee schedule and the net work removed him from a letter sent 3 years before. L.C. 4603.2 governs here correct ?

Thank you in advance for any help here. ( one confuted Hearing Rep. )

Geoffrey Hodies D.C.


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Friday September 26, 2008 9:17 PM

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Yes, LC Sect. 4603.2 governs along with its complement, 8 CCR Sect. 9792.5. But you need to analyze penalty and interest issues separately. The 15% penalty attaches only if defendant did not send an objection letter within 45 working days of its receipt of the itemized billing and any required reports. An EOB will often suffice as an objection letter, and it sounds as if you received EOBs contemporaneously with payments. Interest accrues from the time the bill became due, which is usually at the expiry of the 45-working-day period, until payment is received. A timely and adequate objection letter stops the penalty but it does not stop the interest. Any penalty and/or interest due is calculated on the unpaid or underpaid amount, which is likely only the PPO reduction in your example. Recognize that P+I on a relatively small amount is a miniscule amount, perhaps not worth the effort to collect.

General advice on PPO networks: It can be to a physician's benefit to join a PPO to get more business via referrals. But negotiate your contract with the PPO so that it will be entitled to a fee reduction only for charges on those patients it has referred to you. It makes little sense to allow a reduction to your charges on non-referred patients. If the PPO will not allow such a restriction, you may be better off not participating. Example: say you treat 50 new patients per month on average, and a PPO refers five of those. If your agreement is to give a 10% PPO discount on charges for all your patients, you're treating those five referrals for free. If the PPO sends you 25 new patients (half your workload) per month, then your participation in the PPO is beneficial. I have yet to see a PPO contract that, in practice, benefited the provider.



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