As of April 1, 2011, CoverColorado will be switching to a new fee schedule for reimbursing providers. In the past, CoverColorado has used the Rocky Mountain Health Plans provider network, and doctors were paid according to the RMHP network-negotiated rates when they treated CoverColorado members. The new CoverColorado-specific fee schedule applies to any provider who treats a CoverColorado member, regardless of whether that provider is part of the RMHP network or not.
The letter CoverColorado sent to providers last month gives examples of the average reimbursements paid under the RMHP network agreement, and also shows the new rates – for specialists and PCPs – that will take effect next week. The new rates are based on a percentage of the Medicare Physician Fee Schedule as of December 31, 2010. Rates for PCPs are 120% of what Medicare pays, and rates for specialists and other health care professionals are 115% of what Medicare pays. The chart provided by CoverColorado includes reimbursements for the eight most common billing codes that they get from providers. Under the RMHP network schedule, the average of the eight amounts is $118.33/visit. Under the new CoverColorado-specific fee schedule, the average is $113.62 for specialists and other non-PCP providers, and $118.58 for PCPs. If we average those two amounts, we get $116.10/visit across all providers, which is only a couple dollars lower than the average under the old schedule. I don’t know what percentage of office visits reimbursed by CoverColorado are for PCPs and what percentage are for other providers, but overall the total reduction in reimbursements is likely to be relatively small on a per-provider basis.
A letter that was sent to CoverColorado members last month explained the reasoning behind the changes. Although the overall decrease in reimbursements only comes to a couple of dollars per visit, that adds up to a significant savings when applied across all 13,000 members that CoverColorado insures. The plan has to remain solvent until 2014 when all individual health insurance policies will be guaranteed issue under the PPACA regulations. As the letter notes, CoverColorado does not receive funding from tax dollars. Expenses are paid with money from member premiums, assessments on insurance carriers, and the state’s unclaimed property fund. But the number of members has grown considerably with the recession (no doubt linked to the higher unemployment rates, and to the increasing number of small businesses that have found themselves unable to continue to afford health insurance for their employees), and CoverColorado was forced to make changes in order to reduce the cost of paying claims.
Under the new fee schedule, members no longer have to see a provider on the RMHP network. Instead, they can go to any provider in Colorado, but the provider has to agree to CoverColorado’s fee schedule and cannot balance bill additional charges to the member. Members have an option to pay out of pocket for care from a provider who doesn’t accept the new CoverColorado fee schedule, although it’s unlikely that many members will do so – most will likely seek out a provider who does accept the new fee schedule.
It’s unclear at this point how the new fee schedule will impact the availability of doctors for CoverColorado members. Since providers no longer have to be in the RMHP network, there’s a potential for an increased availability. I would say this may be especially true for PCPs, who will receive a slightly higher reimbursement rate overall. Whether or not additional providers who were not part of the RMHP network decide to accept the new CoverColorado fee schedule remains to be seen.
Hopefully the small reduction in reimbursement rates will be enough to keep CoverColorado operating solvently until 2014. If it is, it would seem to be a good trade-off for CoverColorado members, even if the availability of providers declines slightly with the new fee schedule.