Most of the commercial payors are paying PHP (Partial Hospitalization Plan) and IOP (Intensive Treatment Plan) at a bundled daily rate. Many of the plans are now adding urine drug screens to the bundled daily rate and imposing a cap on the number of screens that can be done during an admission. Plans are paying rates that are much nearer to a Medicare rates. Payments based on a reasonable percentage of a provider’s charge are becoming harder to find, as the calculation of what is a usual and customary rate of payment continues to decline.
Yet, a great portion of substance abuse facilities are operating with more clinical staff, at a higher level through licensure, with better Electronic Medical Systems, more programs to combat some of the symptoms of addiction and with a greater awareness of compliance with state and federal guidelines. Even with these necessary improvements, reimbursements continue to decline.
A healthcare provider’s “billed charge” is usually the total charges billed before applying any contractual discounts. Where there are no contractual relations, a provider’s charge may be considered the equivalent of fair market value for the service provided. But what is fair market value? If the provider is contracted the rate is confidential and not subject to disclosure. If the provider is non-contracted, there is no standard billing rate for providers, making it difficult to get reliable rate data on what is fair market value for similar services or similar providers. One Florida court has found that “fair market value” is the price that a willing buyer will pay and a willing seller will accept in an arm’s length transaction.
Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.