By Fanny Seiler, The Charleston Gazette, W.Va. Knight Ridder/Tribune Business News
Jun. 7--The Public Employees Insurance Agency may have to start negotiating fees with physicians, Director Tom Susman said Wednesday in response to a significant increase in claims paid by PEIA.
From July 1 through April, PEIA-paid claims totaled $28.8 million, a $5.8 million jump over the same period the prior year.
'We may have to look at physicians' contracts,' Susman said.
Last year, PEIA went to a 'facility-nonfacility' fee schedule that attempted to reimburse costs incurred by doctors in hospitals and by doctors with a higher overhead cost for their private offices.
But Susman said PEIA didn't accurately predict the cost of the changes, and how they would change billings from physicians and other health-care providers after the changes. PEIA didn't do monthly tracking, he added.
'I don't think anyone costed it out enough to know what they were doing.'
PEIA has five categories of fees, depending on the level of services. Susman said utilization has gone up to the highest code.
Staff believes some of the increased utilization resulted from patients having to get periodic tests when they were taking new prescription drugs.
PEIA is the best payer of any large insurance group, the director said. PEIA's fees were compared with Mountain State Blue Cross and Blue Shield's preferred provider organization, Carelink Health Plans, and Health Care of the Upper Ohio Valley.
Claims paid to hospitals for in-patient services increased from $46 million to $48 million, and the outpatient claims went from $27 million to $28 million during the same 10-month period.
Susman said PEIA currently has an evaluation committee that is reviewing bids received from private vendors to review bills from physicians and other providers to see if they are appropriate.
By the end of the fiscal year June 30, PEIA is projected to pay $47 million more for enrollees in its indemnity, or fee-for-service, plan. Susman said the estimated total is $299.18 million, compared with $253.77 million last fiscal year. 'It probably will be $50 million more by the time it's all said and done,' he said.
The pharmacy costs are projected to be $85 million, compared with $60 million the previous fiscal year.
Susman said 10,000 of the 200,000 people PEIA covers are coming back to the indemnity plan from managed-care programs, partly because Carelink offered a plan with less coverage.
The director is going to speak with representatives of the West Virginia State Medical Association to see if the organization has any suggestions. He said the association can help PEIA hold down prescription drug costs by telling the doctors to prescribe lower-cost drugs that will be just as effective as higher priced ones.
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(c) 2001, The Charleston Gazette, W.Va. Distributed by Knight Ridder/Tribune Business News.
