An access-oriented negotiated fee schedule. The Caterpillar experience

• Published in: Annals of surgery 1987-09, Vol.206 (3), p.349-357
• Main Authors: Egdahl, R H, Hertenstein, R D
• Format: Article
• Language: English
• Subjects: Fee Schedules; Health Benefit Plans, Employee - economics; Illinois; Industry; Insurance Claim Review; Insurance, Health - economics; Insurance, Surgical - economics
• ISSN: 0003-4932; 1528-1140
• DOI: 10.1097/00000658-198709000-00013

This paper describes the system used by Caterpillar Corporation (CAT) in Peoria, Illinois, to reimburse surgeons. The CAT system assures access for Caterpillar employees and their families to a selection of qualified surgeons, while achieving cost savings through improvements in processing of surgical claims and negotiation of selected fees. CPT-4 codes are recorded for greater accuracy, when indicated, surgical services that have been incorrectly unbundled are rebundled, and the appropriateness of surgical assistant charges is reviewed. A "degree of difficulty" relative value scale (DODRVS) of surgical services is periodically revised as technology changes. The DODRVS multiplied by a regional factor, determined by local market research, establishes the fee that CAT will pay the surgeon. Balance billing is permitted if the patient (1) is informed in advance by the surgeon that the fee will be higher than CAT will pay, and (2) knows that the service can be obtained from other local surgeons who will accept the CAT fee. The goal of the CAT method of surgeon reimbursement is to gain physician support for an access-oriented, market-driven negotiated fee schedule. Compared with a resource-based relative value scale RBRVS) methodology, the CAT system is not formula-driven and depends on physician acceptance.