United sets new basis for fee schedule

UnitedHealthcare abandons a program that allowed for changes in reimbursement without warning to physicians.

By Emily Berry — Posted March 2, 2009

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UnitedHealthcare says that starting in April, it will revise contracts that allowed drops in physician pay without notice, a move the company says will affect 70,000 doctors nationwide.

United's variable contract agreement, which the company said was based on a "progressive RVU" methodology, will be replaced April 1 by one based on Medicare's 2008 resource-based relative value scale.

That means instead of changing pay rates when Medicare adjusts its relative-value units every three months, United will continue to pay those doctors fees based on the 2008 Medicare pay scale.

United spokeswoman Cheryl Randolph said the change would affect 12% of its network physicians across the country and was meant to "increase the reliability and predictability of physician payments."

About 25,000 California physicians were paid under the variable fee schedules, said Aileen Wetzel, associate director of the center for economic services at the California Medical Assn.

According to the CMA, which complained to United and state regulators, the progressive RVU fee schedule updates were dropping payment by as much as 9.5%, including pay for some common CPT codes, such as those used for preventive visits.

Wetzel said an attachment to physicians' contracts titled "Additional Information About Your Fee Schedule" revealed that United reserved the right to make changes to reimbursement as part of "routine maintenance."

She said CMA had asked United last year to send notices of their rate changes for doctors who were contracted under the variable scale.

Basing payments on 2008 Medicare pay rates is not an ideal solution given that 2009 Medicare rates are higher, but adding predictability is an improvement, Wetzel said.

"The fee schedule is not necessarily more favorable, but the good side of that is it is fixed," she said.

The AMA opposes the use of RBRVS as a basis for non-Medicare reimbursement unless the scale is "annually updated and rigorously validated."

Insurers in California, as in other states, including Ohio and Kentucky, are required to give written advance notice of material changes to contracts.

Over the last five years, health plans, including Aetna, Cigna and various Blues plans, agreed as part of federal class-action settlements with physicians to give reasonable notice of fee schedule and contract changes. United was not among those plans.

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