Dive Brief:
- A small benefits consulting firm, ELAP Services, advises clients not to pay the full amount of hospital bills, based on their analysis of charges, according to a new Kaiser Health News report. If a payment dispute arises, the company provides for defense counsel in exchange for a percentage fee tied to the total hospital charges.
- ELAP determines appropriate reimbursement based on Medicare rates with a small added cushion to ensure the hospital makes a profit.
- Under ELAP's model, neither employers nor their claims administrators sign contracts with hospitals. Employers detail the reimbursement process in documents establishing how the plan covers workers. There is no hospital network—employees may use any facility and payments are made based on ELAP's analysis.
Dive Insight:
Hospitals have fought back litigiously, but not always successfully—according to ELAP, "overwhelmingly, the providers just accept the payment." A federal judge in Georgia decided a 2012 case in the company's favor versus a hospital. ELAP's legal team relies on several arguments: How can hospitals justify charging employers and individuals so much more than they charge Medicare, and how can patients consent to prices that they won't see until after services have been rendered? How can that little gauze pad possible cost $30?
ELAP clients number around 200 employers providing health coverage to 115,000 workers. The company has been successful in reducing health costs by 25% for some. Eric Hartter, chief financial officer of Huffines Auto Dealerships, an ELAP client, said in an interview, "This is the best form of true healthcare reform that I've come across."