By: Jon Jablon, Esq.
Case-by-case individualized negotiations are simple, and that simplicity is part of what makes vendors who perform these type of negotiations so attractive. This is not to say that it’s easy to secure great deals – but from a payor’s perspective, the process is generally fairly simple: you send a claim to the vendor; the vendor works its magic with the provider; the vendor sends the claim back to you with a negotiated rate attached to it and often a note about when it needs to be paid. No hassle, no fuss.
A small percent of the time, though, it gets more complicated. I don’t mean if a claim can’t be negotiated; I mean a situation in which there is a complex contractual dilemma associated with the negotiation.
For instance, we recently dealt with a situation where a provider was extremely slow to respond to our offers. We didn’t receive a refusal to negotiate; on the contrary, the provider’s billing agent was willing to work with us, but didn’t get back to us in a timely manner due to either internal bureaucracy or possibly just not being great at his job. Ultimately, what happened was that our client hit its 30-day payment mark, and the plan’s broker was adamant that the group not risk a late payment to a provider due to the provider’s own slowness to respond. So, the plan paid the claim at its allowable amount (somewhat higher than the desired negotiated rate) – but then after that payment was made, the provider finally responded to our last offer with a counteroffer of its own. The provider didn’t yet realize that it had already been paid a higher amount than the counteroffer it made to us – likely ascribed to either poor communication within the provider’s systems or office, or, again, possibly just this person not being great at his job.
The first thing we did was not to let the provider know that payment was already made, but to say, unequivocally, in writing, that we accept this offer. That was an important first step, since any time after the offer is made, it can be revoked for any reason (or for no reason) – but once we accept it, it can no longer be revoked. We wanted to make sure the agent didn’t have the chance to revoke the offer the second we told him that the plan had already paid.
After we issued a written acceptance to the written offer, we then informed the billing agent that the payment had already gone out, and we provided the calculations for how much the provider should refund to us from that payment – or, alternatively, the payor could cancel the check and write a new one. We gave them the choice. The billing agent, however, was not happy. He argued that when payment was made by the plan, the negotiation was canceled, and the fact that he made an offer to us after payment means that his offer wasn’t valid. Our legal team forcefully pointed out that there’s no basis in the law for that, and parties are free to negotiate even after payment has been made. The previous tendering of payment has absolutely no bearing on the right to negotiate; it simply creates an overpayment, which is the situation we were facing then. The provider tried to argue that its own offer was invalid. What a joke!
Fast forward two weeks, and we finally got the provider to accept the negotiated rate, which is ironic, because it was the provider’s own offer. We were confident that it would ultimately have this conclusion, but that didn’t make it any easier to stomach the provider’s bad attitude.
The moral of this story is that even something as simple as a plain old claim negotiation can still develop certain unexpected hiccups. Unfortunately, that is sometimes the case with all sorts of daily transactions! If you are facing any issues with negotiations, or other processes that should be simple but have become unexpectedly complex, The Phia Group is here to assist. Feel free to contact attorney Tim Callender at tcallender@phiagroup.com or 781-535-5631, and we’ll do whatever we can to help improve your self-funding experience.