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Repricers and “Cost Containment” Solutions

In 2010, we saw an explosion in the number of benefit plans employing repricers and ―cost containment‖ companies. Typically, these companies offer to review charges submitted by providers and reduce the charge to a “reasonable’ amount under the auspices of “usual and customary” reimbursement. In exchange, the repricer is usually paid a percentage of the difference between the billed charge and the repriced amount. This arrangement frequently results in payments to the repricer that exceeds payments to the provider for medical services.

Repricers and cost containment companies purport to use “proprietary information”, often characterizing it as “industry accepted” or “national”.  In fact, most repricers do little more than access discredited databases, such as Ingenix, or use a Medicare plus formula, such as reimbursement at 125% of the Medicare rate.

Although it is often difficult to determine whether a plan is using a repricer, there are several key indicators:

  • EOBs that falsely state the adjustment is based on a contract or negotiated rate when there is no agreement
  • Delays in processing and payment of claims
  • Drastic changes in reimbursement rates during a course of treatment for later dates of service—sometimes these will be accompanied by refund demands for earlier dates of service
  • Involvement of reinsurers, who often require the use of repricers

Repricers and cost containment companies should be aggressively fought. They rarely comply with applicable plan language and frequently mislead providers, plans, and patients. The Gibson Firm has successfully handled repricers in the past and looks to continue preventing these abusive reimbursement practices in the future.