Dan Gottry - Blog

Dan Gottry's Blog

Thursday, September 28, 2006

Administrative Fees Cover Losses by Hanger Providers

Continuation of care seems like a slick way for Cigna to sidestep the complaints from their decision and play right into the hand of Hanger inasmuch that no "new" work will be coming through the door. Continuation of care should read "Choice of Care."

While I am at it, there seem to be other problems with this picture inasmuch that Hanger owns Linkia.

Who will control what reimbursement rates are established for each independent provider and for each Hanger provider? Does anyone think there will be fairness with this? Or, is the Linkia processing (administrative) fee high enough to cover Hanger's loss of revenue from deep discounted O&P services and provide Linkia with an attractive bottom line that shores up the P&L statement of Hanger?

If so, then in my opinion, it becomes all about administration and the bottom line, and little about the health care for which the administrative wing exists in the first place. I think I knew that was coming anyway. At least for the past few years, it sure seems that way.

Regarding contracts. Federal law allows for a reasonable profit for services rendered with any federal contract. If it can be shown that a reasonable profit is not being made (which I believe is possible) with the O&P reimbursement rates that are being handed out by Cigna, Anthem, and other health carriers, I believe we could at least get the attention of the federal government. After all, when providers will not or cannot provide health care services, the costs associated with these services are frequently shifted to the federal governement, via emergency room treatments, via Medicaid, etc., etc.

In essence, it seems like the trick these days is for private insurance carriers to shift their costs back to the federal government, when they can. Smart thinking as long as it will last.

Wil Haines, CPO/L

posted by Daniel Gottry at 6:58 AM