The Silent Discount Dilemm Ppos

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The Silent Discount Dilemma: PPOS In the world of health care finance, managers are faced with many ethical decisions. This is often the case when it comes to the medical billing side of healthcare. There are currently several billing schemes in practice that are under scrutiny by the American Hospital Association (AHA) and the American Medical Association (AMA). One such scheme is the practice of taking discounts on medical claims that your company is not entitled to. This practice is referred to as a “silent PPO.” To understand this practice better, it is important to understand what a PPO is and how it works. The acronym PPO stands for Preferred Provider Organization. A Preferred Provider Organization (PPO) is one type of…show more content…
Instead, customers are encouraged to use providers within the network through offering them reduced rates for service. When a customer uses a provider that participates with the program, they pay less in the form of out of pocket copayments. These discounts are available because the health care providers within the network have contracts with the PPO stating the agreed upon discounted rates the providers will be paid when they provide services for members of that particular PPO (Gapenski, 2013). A silent PPO is what you have when a legitimate PPO sells its provider network information to other groups or to brokers (Jones, C., Mills, T., 20060. The hospitals and physician groups who have contracted with that PPO to provide discounted rates usually do not know anything about this outside arrangement. This practice allows payors to receive discounts that they are not legally entitled to (Jones, C., Mills, T., 2006). Any time a payor receives the under-the-counter discounts on medical claims that the provider is not legally obligated to give, it is referred to as a silent PPO (Speisman, A., Hachenburg, M., 2006). It is perfectly legal for PPOs to make the information regarding who their preferred providers are, as well as the discounts that the PPO has contracted with these providers, available. According to current law, it is also legal for the PPO to charge a fee for this information. Brokers can buy this information, and sell it to payors. The
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