If you see, Out-of-network refers to the provider’s non-participating relationship with the payer network and in such case, physicians may need to get prior approval from the carrier (i.e., pre-certification). Out-of-network (OON) plans are costly and many employers cannot afford to purchase them, so they have HMO-only coverage. The HMO has its own limitations and HMO will not pay under any circumstances if there is no provider within 50 miles by car.
The research found that in-network hospitals, 11.8 percent of anesthesiology care, 12.3 percent of care involving a pathologist, 5.6 percent of claims for radiologists, and 11.3 percent of cases involving an assistant surgeon were billed out of network.
Without losing patient volume the physicians who can engage in out-of-network claims negotiated significantly higher in-network reimbursement rates from private insurers compared to physicians who could see lower volumes. if patients are treated by Out-of-network physicians then usually their Out of network claims reimbursed at a lower rate.
However, they can make up for this loss with the help of balance billing. Now let’s understand what balance billing is.
Balance-billing is a completely different thing than charging a patient a deductible, co-insurance, or co-pay. However, it is a practice where a health care provider bills a patient for the difference between their charge amount and any amounts paid by the patient’s insurer or applied to a patient’s deductible, coinsurance, or copay. Hence most physicians took this as an opportunity to get a more reasonable reimbursement than they could ever receive in-network that drives many physicians to drop insurer contracts.
Balance billing is generally not permitted for patients with government coverage but is becoming more common for commercial. Some limitations have been imposed by Federal regulations on balance billing for emergency services, such as minimum payment levels for emergency services, which may decrease the size of a balance bill but does not eliminate it.
These regulations focus on emergency services because a patient’s ability to select in-network versus OON providers in an emergency is limited. Federal regulations are not in place, however, for non-emergency services, leaving states to determine regulations on their own
Out-of-network claims is an opportunity for physicians still certain problems associated with OON which physicians must understand else they would lose revenue.
Challenges of out-of-network status
In this status, physicians must carefully pick their patients. It is often observed that most HMOs and a few lower-cost PPOs provide no out-of-network coverage at all. But most PPOs recognize only a fraction of his full bill due to OON status.
Another important challenge is the insurer may send the payment to the patient rather than the doctor as the member’s insurance contract may have an anti-assignment clause, which directs that payments go to the member. Hence there are high chances for the patient to use that money for something else.
Out of network (OON) again deal with legal challenges as most out-of-network physicians balance bills at reasonable rates while others are not. The study showed that physicians balance billing patients at 30 or 40 times Medicare rates. Hence some states are prohibiting balance billing by out-of-network providers, for instance, 13 states prohibit balance billing by out-of-network providers in specific situations, according to the Kaiser Family Foundation.
Apart from various challenges which are already demonstrated above, still, there is a growing trend for out-of-network status. Hence it’s important to know the factors are driving this trends and its implications.
Trends for OON
The main driving factors behind these trends are only are insurers narrowing their networks, but the new healthcare exchanges seem to be accelerating the trend. Moreover, many exchange plans that are not dropping doctors are cutting reimbursements which, in turn, prompts physicians to drop out.
Although different strategies are adopted by payers and providers, a trend is emerging of increased balance billing to patients. There are many implications to the changes happening in the OON reimbursement space. Current OON reimbursement policies must be reviewed by payers and providers or, if none is in place, establish one.
The OON reimbursement space is in flux, and there could be payers overpaying or providers being underpaid. Evaluating where you are about your market is critical for current financial success and positioning yourself moving forward.