There are many benefits to be an in-network healthcare provider. Many physicians and other healthcare practitioners prefer to go “in-network” because these network agreements drive patients into their office. Apart from this, the benefits of being in-network include the following:
- Patients are referred to the practice by virtue of their inclusion on PPO and HMO networks;
- Medical claim checks are issued more quickly;
- Medical claims checks are issued to the practice directly, not to patients; and
- Claim denials are reduced.
But with gains there are some losses as well. The major disadvantage of becoming an “in-network” provider is that the healthcare service provider has to accept very low reimbursement rates for services provided. We can say that the contract provisions are typically one-sided, favoring the health insurer.
As a result, more and more health care practitioners are deciding to go Out of Network. This means the healthcare practitioner chooses not to participate in insurance carrier’s PPO and HMO networks, and no managed care contracts are executed. The most important advantage of being an out of network provider is that reimbursement rates are higher than that of in-network providers.
As said before, Out of network reimbursement is higher than in-network. Reimbursement for out of network services may be on a “usual, customary, and reasonable” (UCR) basis. UCR means the prevailing rate that is most common for a particular medical service rendered in a particular area. UCR generally exceeds the negotiated amount in the participating provider agreement. However, OON reimbursement is not always fixed to the UCR standard. Many physicians wrongly believe that the out of network benefit is paid at the UCR rate. OON reimbursement is generally linked to Medicare’s rates, or less. Because, patients are responsible for paying any balance left reimbursed after the insurer’s payment. OON claims are more costly to the third party payer and to the patient.
To encourage Out of Network claims, insurance carriers pay directly to its participating providers on behalf of the patients who receive those services. Many insurance carriers pay the non-participating physician directly, some insurance carriers pay for services rendered by the physician directly to the patient. Now the question is how this happens? Although all the right authorization and verification steps were performed in the physician’s office. The physician practice’s patient financial policy or other intake paperwork contains an assignment of benefits. An assignment of benefits is an agreement whereby the patient requests that the insurance carrier issue payment directly to the provider. Physicians who are out of network should be aware of the potential obstacles. The physician should determine whether the state in which he or she practices has a mandatory assignment of benefits statute. It would be beneficial to educate the out of network patients by informing them that the physician’s payment for services rendered may be sent to them. By knowing the potential challenges to out of network reimbursement, the practice can better manage its risk and its expectations; And, thus reduces the probability of chasing payment.
To Know more about Out of Network claims and there Reimbursement, join us on our upcoming Live Webinar on “How to Negotiate on Out of Network Claims” on “March 27, 2019”.