Employers aiming to reduce health care plan costs could go back to the dictionary when it comes to their summary plan descriptions.
From reviews of self-funded employer health care claims, analysts have found broad, sweeping definitions of “physicians” which resulted in services billed at the higher physician rate even though the services were delivered by surgical technicians, physician’s assistants, physical therapists, social workers, and others not generally considered a “physician” by a layman’s definition. Narrowing the definition of physician could reduce costs.
The following are a few of the definitions found in SPDs with various major insurance companies:
- “Physician” means a legally licensed Physician who is acting within the scope of their license and any other licensed practitioner required to be recognized for benefit payment purposes under the laws of the state in which they practice and who is acting within the scope of their license. The definition of Physician includes but is not limited to: Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.), Chiropractor, Licensed Consulting Psychologist, Licensed Psychologist, Licensed Clinical Social Worker, Occupational Therapist, Optometrist, Ophthalmologist, Physical Therapist, Podiatrist, Registered Nurse (R.N.), Licensed Practical Nurse (L.P.N.), Nurse Practitioner, Physician’s Assistant, Speech Therapist, Speech Pathologist and Licensed Midwife (if covered by the Plan). An employee of a Physician who provides services under the direction and supervision of such Physician will also be deemed to be an eligible provider under the Plan.
- Physician means any of the following legally qualified health care professionals from whom you receive treatment, provided such person is properly licensed in the state in which he or she performs services:
- Certified social worker
- Licensed surgical assistant
- Medical doctor
- Nurse practitioner
- Oral surgeon
- “Provider”: any person or entity licensed by the appropriate state regulatory agency and legally entitled to practice within the scope of such person or entity’s license in the practice of any of the following:
- Chiropractic services
- Behavioral health
- Physical therapy
- Oral surgery
- Speech therapy
- Occupational therapy
By comparison, The Centers for Medicare and Medicaid Services (CMS) defines physician using a narrower scope. “For the purposes of Open Payments, a ‘physician’ is any of the following types of professionals that are legally authorized by the state to practice, regardless of whether they are Medicare, Medicaid, or Children’s health Insurance Program (CHIP) providers”:
- Doctors of Medicine or Osteopathic Medicine
- Doctors of Dental Medicine or Dental Surgery
- Doctors of Podiatric Medicine
- Doctors of Optometry
In terms of costs for employers, having a definition with a more specific view of “physician” in an SPD can impact reimbursement. Employers can work with their insurance partners to change the definition. The difference between a physician and a mid-level provider (i.e., PA or NP) is approximately 15% in terms of fee rates. For Medicare reimbursement, a physician was reimbursed at 100% of the Medicare fee schedule, while an NP or PA was reimbursed at 85%. Bill Young, SmartLight Analytics’ Head of Clinical Operations, said it is something worth reviewing.
“We investigated many cases in which the physician billed as if he/she rendered the service in an attempt to secure the higher reimbursement when, in fact, a mid-level actually performed the service.” He said a board definition leaves the door open for providers of all levels to bill as physicians.
“A narrow definition could limit their ability to bill the plan representing themselves as physicians,” Young said.