Vachette Pathology

Since their creation by the Balance Budget Act (BBA) in 1997 to provide more healthcare choices for Medicare beneficiaries beyond the HMO plans, the plans have reached an unanticipated enrollment of 2 million members. While traditional HMO plans are based on the patient having a primary care giver within a closed network of providers, PFFS plans allow greater flexibility and allow the patient to choose any healthcare provider as long as the provider is eligible to provide healthcare services under Medicare Part A and Part B.

PFFS plans are not required to have a written contract or agreements with physicians, hospitals, or any other providers. Although the Medicare law permits PFFS plans to meet access requirements by entering into written contracts with a network of providers, existing PFFS plans generally have not opted for this approach.

Regardless of a signed contract, the law provides that PFFS plans are “deemed” to have a contract in place with any provider eligible to provide Medicare covered services. PFFS plans are allowed to pay providers with no contract in place a fee greater, or equal, to Medicare fee-for-service rates; the healthcare providers are required by law to accept these rates for PFFS plan patients.

The Centers for Medicare & Medicaid Services (CMS) states a provider is “deemed” by law to have a contract with a PFFS plan when all three criteria are met:

• The provider is aware, in advance of services rendered, that the patient is a member of a PFFS plan. Patient must show their plan membership ID at every visit.
• The provider either has a copy of, or has reasonable access (PSSF plan website) to the terms and conditions of payment.
• The provider furnishes covered services to the PFFS member.

You will also be “deemed” contracted if a patient enters a hospital for non-emergency care and advises the hospital that he or she is a member of a PFFS plan and presents their enrollment card. All providers that contract with this hospital, or are employed by the hospital are considered "deemed" contracted as soon as they provide services, even though providers typically do not verify plan enrollment themselves.

According to the US Department of Health & Human Services, most PFFS plans operate exclusively under the “deemed” network approach. Since there is no signed contract under the “deemed” approach, providers are not required, except in an emergency, to accept PFFS plan enrollees for treatment even if they previously have agreed to accept that PFFS plan’s terms when treating other patients from the same plan or they have agreed to treat that enrollee on earlier occasions.

The October 2008 issue of The Brief, a publication of The Commonwealth Fund states, the Medicare Improvements for Patients and Providers Act 2008 (MIPPA) contained several provisions to improve Medicare benefits and provider payments. One new policy removes the “deeming” authority for PFFS plans and requires them in certain areas to establish networks of contracted providers beginning 2011.

If you are not being forced to sign an actual contract as a PFFS plan provider, then don’t. The “deeming” authority has its advantages: 1) you do not have to accept the plans enrollee even if you have in the past, 2) they are still a Medicare Program and have to reimburse Medicare rates, and 3) keep in mind, once you sign a contract, they could possibly rope you into their network for discounted rates from other carriers.

For more information on how Vachette Pathology can help reverse negative payment trends and secure your financial future, contact Mick Raich.