Phia Group Media


Phia Group Media

Phia Undercover: Two Chargemasters at Addiction Centers

At Phia we sincerely try to be reasonable in all our provider settlements, but every once in a while we have problems achieving our goals.  A few weeks ago, we received claims with four different addiction centers, using the same biller.  This biller was billing $4,500.00 per day for detox, $1,200.00 for labs – the works.  We were asking for reasonable per diem rates which we typically get without too much hassle; they offered 10%, and then 20% and then 50% (which was still ridiculous).

They kept telling us all the other agreements they had with large PPOs or other “big” cost-containment vendors were for 50% discounts – so what was our problem, why were we asking for a greater discount?
Because that is the Phia way and discounts mean nothing!  We tried nearly everything to break through:

•    We sent them the plan document language and had an attorney argue the merits
•    We blitzed them with objective data
•    Eventually we even tendered conditional payments to try and settle the dispute…which they actually sent back!

Nothing was working, and we were stuck – but necessity is the mother of invention, and so we invented a way to push for a better rate.

I had recently read the book “Scar Tissue” by Anthony Kiedis (lead singer for the Red Hot Chili Peppers).  In his book he describes his struggles with addiction and the costs of treatment…and they were way less than what I was seeing billed, and it occurred to me that Kiedis was paying cash for his treatment (he could certainly afford it). That gave me an idea…

Using pseudonyms and personal email accounts, we emailed each addiction center advising that we were inquiring about the costs for treatment.  To be honest, we intimated that we were personally seeking treatment, which we understand could be seen as in poor taste; please note that I am married to a marriage and family therapist and so I am not insensitive to mental health issues – but diligence for our client was the priority.

We advised that we did not want to use “insurance” but wanted to see the private pay rates instead, which they quoted, and shockingly they were 10-20% of what the insurance rates were, representing 80%-90% discounts off the billed charges.  They have (at least) two completely separate charge masters: one for self-paying individuals, and one for insurance.

Taking off our self-pay beanies and putting our Phia cowboy hats back on, we informed the biller that we were aware of their private pay rates and with that in mind, we strongly urged them to reconsider our offer.
Miracle of miracles, they signed off, and we were able to close the accounts for a fair rate with a signed agreement. A little creativity and some elbow grease can go a long way!