Frier Levitt has come to learn that over the last several months, certain Medicare Advantage Organizations (MAOs) have been unilaterally and substantially increasing capitated provider groups’ claims reserve period by several months, requiring these providers to effectively escrow millions of dollars in reserves – money on which no interest (except for the MAO) is earned. In certain instances, capitated practices have seen – effectively without warning – two hundred percent (200%) increases in claims reserves requirements imposed with little notice. Those in global capitated risk arrangements appear to have been hit particularly hard by these changes.
Providers are not without recourse. Experienced healthcare counsel can review your capitated value-based care contract – be it percent of premium, global capitated risk, or otherwise – and advise you and your practice of your rights. Frier Levitt’s skilled litigators within its value based care and risk adjustment groups can bring pressure to bear on payors unfairly putting the squeeze on providers through claims reserves increases, and leverage pre-litigation resolutions or, if need be, take the matter to court or arbitration to vindicate your practice’s rights. Beyond potential breaches of payor-provider contracts, these claims reserve increases may arguably skirt certain regulatory prohibitions, such as Medicare Advantage’s (“MA”) medical loss ratio rule, which, in effect, precludes MAOs from retaining more than 15% of premiums received from the government as revenue.
Capitated providers need a healthcare firm versed in the complexities and nuance of capitated, risk adjusted payor-provider models. If your MAO has recently substantially increased claims reserves requirements, contact Frier Levitt for a free consultation.
