UCR Percentiles

[Guest caseylaw]

A self-funded group uses a UCR database. I understand that most groups use between 75-90th percentile. The database provider does not want to or does have information on what percentile the majority of groups or TPA's use. Does anyone know or willing to share? We use the 90th percentile and have for years without knowing whether or not the adjust.

[GBurns]

I am curious as to why a database of UCR is used. What is the purpose?

[KIP KRAUS]

Most medical plans I've been envolved with use the 90th percentile when using a UCR schedule.

Dental plans sometimes use lower percentiles.

I don't understand GBurns' question. POS Medical plans for years have used UCR to reimburse medical expenses.

[JanetM]

Our plans use the 95th percentile of the Ingenix UCR tables.

[mroberts]

There's not going to be too much difference between the 80th and 90th or 70th and 80th. Even if you're comparing 70th to 90th it isn't that much. I believe the standard is 90th, however, that may change a bit since employers may be able to save a couple bucks by lowering it down to the 80th.

[Guest caseylaw]

There has been litigation over a plan's determination of UCR. It is my understanding that a third party should be used. I only know of Ingenix and ADP. How a plan determines UCR must be disclosed in the SPD.

[GBurns]

The reason for the question was that for quite a while now, all the self funded plans that I have been seeing were comparing or benchmarking the discounted rate negotiated with the provider. In other words a comparison of the discounted rate rather than the original UCR. The premise being that it does not matter what the UCR is, it only matters what your reimbursement rate will be because that is what you will be paying. Benchmarking is done against the average for that Code.

I have also not seen any PPO or POS that reimburses on UCR all I have seen are reimbursements in accordance with negotiated contract rates. The contract rates sometimes were sometimes not negotiated as a discount off of the UCR but were developed otherwise.

[Guest caseylaw]

UCR is only applied to out-of-network claims for PPO plans.

[GBurns]

That still leaves questions including............

What UCR?

Which UCR?

How was the UCR calculated?

Why not use negotiated fee schedules?

Why would the reimbursement to even an out-of-network PPO be paid at billed rate rather than being subjected to re-pricing etc?

[papogi]

You can send an out-of-network claim to the PPO for repricing, but they will come back saying the provider is non-par. There is no negotiated rate, and no repricing. Claims adjudication for PPO's typically use UCR in these cases, and I've most often seen 80% of UCR. A few plans will use the prevailing negotiated rate for out-of-network services.

[vebaguru]

Reimbursement practices vary widely between localities, and from state to state. In one state it may be common for reimbursements to be paid at the 65th-75th percentile. In another state no provider will accept less than the 90th percentile. Networks also vary widely. In my state almost all providers are on one or both of the 2 major networks: UCR is relatively meaningless since contracted rates are generally lower. There are other areas where a significant number of providers are not on a network or where network fees are higher than the 75th percentile.

Your plan should conform to local practice. If a network is available at a reasonable rental price (such as Beech Street or MultiPlan) and if those rates are less than the 90th percentile your plan has been utilizing, you should rent a network. In my area no major insurers reimburse at the 90th percentile (except Principal with a very small presence). Most are at 75th or 80th percentile.

Do not misunderstand: the 80th percentile is not the same as 80%. It is the highest rate charged by all providers after eliminating the highest 20%.

[KIP KRAUS]

HIAA, for one has established UCR rates that TPAs can use.

Some major insurers have over the years established their UCR schedules based on actual experience by zip code areas.