“Silent” Discounting (PPO) Arrangements

1. “Silent” Discounting (PPO) Arrangements Ecom PPO.com, Inc.

2. What is a “Silent” PPO? • The most literal interpretation is:  Any organization that acts like or calls themselves a PPO, yet takes discounts on medical claims without the knowledge or contractual consent of a medical provider.  • The more realistic interpretation and most common answer is: Any organization that takes discounts on medical claims without a legitimate relationship (provider contract or leasing agreement) that allows for access to discounts.

3. Why do “Silent” PPO’s exist? • Silent discounting arrangements exist as a result of fallacies in the current system.  • Belief that if consumers are penalized enough they will only seek a provider in the PPO chosen by the consumer’s health plan. • Belief that selection of PPOs based on geography will provide satisfactory access to providers. • Ignoring the importance of freedom of choice by consumers when seeking medical treatment.

4. Who are these “Silent” Networks… the answer might surprise you! • Silent discounts are provided to payers by a number of different companies who call themselves a variety of vendor types. These companies use “Silent” discount arrangements as the basis for their entire business model. • However, the organizations that provide the majority of “Silent” discounts to payers of all types are themselves, in fact, some of the largest legitimate and best known PPOs.

5. Who is to blame for the problem? • It is easy for everyone to point fingers at the organizations that provide these “Silent” discounts to the payers as the chief culprits.  However, if the payers did not agree to pay a large percentage of the savings to the organizations providing the discounts, they would simply cease to exist. • Taken a step further, if the payers were precluded from acquiring and utilizing these discounts legally and the laws were ENFORCED, then the “Silent” organizations would cease to exist almost immediately.

6. Who pays the price for all of this activity? • Medical providers lose billions of dollars each year to discounts that were taken on their claims without knowledge and or consent. • With most every provider willing to join most any PPO network today, the providers are doing their part, but the practice of “Silent” discounts is a multi-billion dollar business in our industry.

7. What is the answer? • Better initial selection of PPOs by health plans and carriers has been proven as a way to eliminate the majority of out-of-network claims, which in turn will help eliminate the need for “Silent” discount arrangements. • There are now laws in 14 states that were designed, in part, to eliminate the use of “Silent” discount arrangements and yet they are not being enforced.  The group with the deep pockets is not the vendors providing the discounts, but rather the carriers and health plans that continue to use these vendors.  Until some pressure is brought against these organizations the problems will continue and the providers will continue to pay the price.