Out-Of-Network Claims

Out-Of-Network Claims

Abstract

Everyone uses different criteria to select a new doctor. But, is the insurance company's network part of your list? You may wonder “how does it impact me and why should I even care?” Well, unless money grows on trees at your house, paying attention to whether or not your healthcare providers are in your insurance company's network is a good idea and an excellent way to save, or at the very least avoid paying more than what's necessary. While in-network and out-of-network terminology sounds confusing, this guide will help you to understand the impact of your insurance company's network. Your insurer has identi?ed a group of providers who are “in-network” and has contracted with these providers on your behalf to get services at “discounted” rates. The primary advantage of using an in-network provider is that you receive this negotiated or discounted rate for their services, and your insurance generally picks up a larger portion of the bill than with an out-of-network provider. 

Introduction

Health plans enter into negotiated contracts with a network of providers to assure access to quality care for their members in the most appropriate, cost-effective manner. Health plans may also negotiate “agreements” with providers not considered to be “participating providers;” this includes agreements with providers who are out of the health plan's state-contracted Medicaid managed care service area to whom the health plan may regularly refer patients for services. While these agreements are with out-of-network providers, if these types of agreements set out the payment terms for services, they do not, for the most part, pose claims/payment challenges to the health plans and providers involved(Himmelstein et al 2009). Also, in the absence of contractual payment rates, many providers expect payment in full for “usual and customary charges” which are often vastly higher than costs, and even commercial payment rates. 

Thesis

In the absence of a contract or regulatory guidelines, payments for out-of-network care frequently require case-specific negotiation between the involved parties, a costly and oftentimes unpleasant adversarial process.

Issue Background

An in-network provider is one contracted with the health insurance company to provide services to plan members for specific pre-negotiated rates. An out-of-network provider is one not contracted with the health insurance plan. Typically, if you visit a physician or other provider within the network, the amount you will be responsible for paying will be less than if you go to an out-of-network provider. Though there are some exceptions, in many cases, the insurance company will either pay less or not pay anything for services you receive from out-of-network providers. As a condition of participation, Medicaid health plans are required to establish relationships with a network of healthcare providers so that enrollees will have access to Medicaid covered services(Borger Smith Truffer et al. 2006). However, even with an extensive network of providers, some out-of-network services do and will occur for a variety of reasons. In the absence of a contract or state regulatory guidelines, charges to the health plan (and ultimately the state's Medicaid program) for these out-of-network services are often significantly higher than the fee- for-service rate schedule in that state. Out-of-network payment disputes lead to an adversarial and costly negotiation process that often leads ...