It’s not uncommon for physician offices to receive deceptive PPO solicitations that appear to be genuine business correspondence. These seemingly official letters and notices are often veiled attempts to get physicians to join discount networks and accept discounted rates as payment in full. CMA urges physicians and their staff to be wary of requests for physician information from unknown payors.

Two new deceptive PPO solicitations have recently been brought to CMA’s attention:

Healthcare Networks of America (HNA): A number of physicians have reported receiving “warning” letters from HNA, which threaten that they will be removed from HNA’s preferred provider panel for “failing to return the credentialing information on multiple occasions.” The letter implies that the physicians are already contracted with HNA and will “lose patients” if they don’t respond immediately and pay the $115 membership fee. Physicians should never feel pressured to join a network for fear of losing patients.

Physicians should be aware that most payors do not charge membership or application fees. HNA also requests the physician’s medical license number, DEA certificate number, and federal tax ID number. Physicians should also advise their staff to verify the legitimacy of any such request before disclosing sensitive physician information.

Integrated Health Plan (IHP): Physicians are also receiving solicitations from IHP. The first red flag is the plan’s $450 “application/credentialing fee.” The solicitation also reveals that IHP’s PPO network is leased or rented by more than 1,100 payors.

Additionally, IHP encourages physicians to join its “discount card program.” As you know, discount health cards are not insurance. Unfortunately, many patients are misled into believing they are purchasing health insurance, only to find, when they present the card at the doctor’s office, that they do not have insurance. The Department of Managed Health Care has filed several cease and desist orders against companies marketing discount health cards.

Before joining any network, particularly one that is leased or rented by other payors, you should carefully review the contract, including the list of payors that would have access to the discounted rates. Physicians should ensure that the proposed compensation, including the payor’s payment policies and the rules it uses to adjudicate claims, will be sufficient to maintain a medical practice. Without doing this analysis, you cannot make an informed decision about signing the contract.

To help physicians negotiate and manage complex third-party payor agreements, CMA has published a contracting toolkit, Taking Charge: Steps to Evaluating Relationships and Preparing for Negotiations—A Focus on Payor Contracting. The toolkit is available free to members at the members-only website. Nonmembers can purchase the toolkit for $100 in the CMA CMA bookstore.

CMA has also published a “Silent PPO Action Guide,” which contains an overview of physician discount contracts and discusses the laws that regulate PPO network leasing. The guide is available through CMA ON-CALL (document #1907). ON-CALL documents are available free to members at CMA’s members-only website. Nonmembers can purchase ON-CALL documents for $2 per page at the CMA bookstore.

Contact: Aileen E. Wetzel, 916/444-5532 or awetzel@cmanet.org.