epipen 300x300 | If Epi Pen Can Do It, Why Can’t You? | STATMedCare Payor and Physician Enrollment and CredentialingThe High Stakes Game of Price Increases in Physician Credentialing!

We’ve all heard about Mylan CEO, Heather Bresch, who recently tripled the price of an Epi-Pen pack to $608.00. Epi-Pen auto inject pens are used across the country for life threatening anaphylactic reactions. 48 states have signed legislation mandating that Epi-Pens be carried in all public schools.  This legislation was largely lobbied by an advocacy group called FARE. This advocacy group has donated to one of the sponsors of the bill which was later signed, requiring these states to allow Epi-Pens in public schools. We are in no way saying that an Epi-Pen in school is a bad thing. The senseless deaths of many could have been prevented had this law been signed sooner. We’re only painting a picture for you as to why you, as a physician, cannot do the same thing and simply raise prices when you see fit.

How Does This Relate to Physician Credentialing?

In the credentialing world, there are many different kinds of contracts. As a physician, you may have an individual contract or a group contract.  Your contract is, of course, a legal and binding document between you and the insurance payor.  The fee schedule which is attached to this contract tells you how much you will be paid for your services.

Now, here is the interesting part, the part most credentialing companies don’t even know about…there are three different kinds of fee schedules.

  1. Fee for Service
  2. Carve Out
  3. Lesser of Language

As physicians, you know that you have a set fee for every service you perform. That set fee is transferred onto a HCFA (a billing claim form) and sent to the insurance carrier for payment.  You may bill $500 for CPT 99205 but when you receive payment, you only receive $195.00 and you write off the contractual amount of $305.00. Why exactly did you write this amount off? Because your contract requires you to do so. You may ONLY be paid the amount stated in your contract. You can bill whatever billable amount you would like but you will only be paid the amount stated in your contract.

That’s NOT Fair!

So why can’t you just raise your rates like the maker of Epi-Pens? Simply stated, you have a different type of contract than the drug companies do. Drug companies typically have what is called a Lesser of Language contract. A Lesser of Language contract does not define an exact amount for each CPT or HCPCS code. Instead, it says something to the effect of, “You will be paid 35% of your total billed amount or paid the exact billed amount, whichever is less.” So what would any smart person do? They would increase their billed amount exponentially to ensure their costs are covered. The Epi-Pen manufacturers are playing the insurance game and have exponentially increased their billed amount in order to ensure they receive exactly $608.00. Physicians, however, are stuck in Fee for Service contracts in most cases and, therefore, can bill any amount they want, but will still only be compensated the exact amount stated in their contract.

Re-negotiate Your Contract Rate

As a physician. you have the right to renegotiate a new rate with insurance carriers. Payors will take into account things like your education, years in practice, malpractice history, and how many lives you serve. They also take into account your clinical data. They track every bit of what you do for their members. From the medications you prescribe to the specialists you refer them to. If you’ve been referring them to out-of-network specialists or specialists who charge exponentially more than their peers, you could have a problem renegotiating a new contract.

Expertise Matters

Using an industry leading expert to renegotiate your rates is always best.  Navigating insurance contracts is daunting and time consuming. Leverage credentialing experts who will immediately evaluate the type of contracts you have and go to work negotiating contracts that are going to increase your bottom line. Even if you’ve failed at negotiating in the past a credentialing expert can successfully help you negotiate a new contract. Experts can also advise on billed amounts that you should be billing if they do find that you have some Lesser of Language fee schedules.

So Can You!

If the Epi-Pen manufacturers can make money, so can you. Find a credentialing expert (consultant/group) to guide you each step of the way.

If you have a contract negotiation need, please contact STAT MedCare, LLC today to speak with one of our credentialing experts.


Cynthia Young, the former CEO of STAT, which is a U.S.-based, national provider of credentialing, payor enrollment, rate negotiation, and other credentialing related services.

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