Ask the Experts: Lesser-Than Provisions
We are reviewing our contracts for revenue potential and lesser-than provisions are being discussed. What specific pitfalls should we look for in terms of lesser-than provisions?
Answer: In many managed care organization (MCO) contracts, the term “lesser of” is used to minimize payments to providers using the charges in the organization. For example, if a procedure contains a C-arm and then requires magnetic resonance imaging (MRI), the MCO may disallow the charges for the C-arm and pay the “lesser of.” Pricing may look similar to this: $7,000 hospital charge with MRI and C-arm; $4,500 hospital charge with MRI only and the contracted payment is $4,800. The MCO would pay the $4,500 hospital charge amount and keep the $300.
This question was answered by: David A. Williams, FHFMA, CPA, partner, Horne LLP, and a member of HFMA’s Mississippi Chapter.
|What do you think? Please share your thoughts on this question in the comments section below.|
The information provided through the Forum’s Ask the Expert service does not constitute legal advice, even when the advice is provided by lawyers. You need to obtain your own legal counsel for legal advice and consider the laws and regulations that govern your state. The content and opinions expressed are those of the Forum experts, and not that of their employers or of HFMA. HFMA does not endorse the material or warrant or guarantee its accuracy. The responses are based only on the specific facts or circumstances provided. Forum experts cannot be held liable for outcomes related to any information provided.
Pose another question to our Payment & Reimbursement Forum experts.