Stakeholders wage protracted battle with other payers

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Friday, September 29, 2017

YARMOUTH, Maine – A recent decision by the Washington, D.C., Medicaid program to raise reimbursement for competitive bid items was a win, but stakeholders say it’s a constant battle to keep payers from lowering payments in the first place.

“We are continuing to see the different payers, whether that be state Medicaid programs (or others), adopt Medicare rates or a discount below Medicare rates,” said Laura Williard, vice president of payer relations for AAHomecare. “In some cases, they are just lowering rates and saying it’s because of the trends they are seeing in Medicare.”

The District of Columbia Health Care Finance Office said in September it would raise the reimbursement for competitive bid items to 100% of bid rates starting Oct. 1. Previously, these items had been paid at 80% of Medicare rates, but officials reversed their decision after outreach from The Maryland-National Capitol Area Homecare Association and AAHomecare.

On the commercial payer side, Blue Cross Blue Shield, in particular, is looking at Medicare fee schedules in several of the 36 states where it operates but is not owned by Anthem.

“The big trend I am seeing with those Blues is they have a need to cut the cost of premiums to employer groups,” she said.

Following Medicare rates is nothing new, of course, but with those rates now at unsustainable levels, it’s harder, if not impossible, for providers to absorb.

“It’s going to put people out of business if they’ve held onto those contracts in the hopes that it will turn around,” said Craig Douglas, vice president of payer and provider relations at The VGM Group. “But if those payers represent 40% to 50% of a provider’s book of business, they feel like they simply can’t afford to walk away from it even if it’s—I have to believe—putting them underwater in many product categories.”

Williard has created a reference packet to help providers renegotiate their contracts. She says that being armed with data is the best way to demonstrate the implications of reducing rates, although some payers are more receptive than others.

“If they are truly in the dark about what’s going on, they are more receptive,” she said. “They understand the implications to patient access and providers going out of business.”