Wiki Out of Network Complex Question


East Northport, NY
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I have a complex question

I work for an oon MD. Over the years OON reimbursement has changed dramatically. Not only are deductibles and coinsurance higher but most plans now utilize different fee schedules to determine OON allowance. For instance you can have Patient A with Cigna that uses Fair Health 80% and Patient B with Cigna that uses Medicare rate X 140%.
Now because the # of patients like Patient B have rapidly increased with plans like Oxford, Cigna, UHC etc all having Medicare Rate based plans our practice has been steadily loosing patients because people cant afford to pay the balance billing.

So we are trying to brainstorm ways to keep patients but also be compliant. We also have angry patients who had surgery with us years before and now insurance is different and responsibility is much higher as new plan is MNRP.

Going in network is not a consideration at this point because there are still some OON plans that utilize Fair Health schedules

I have been told by legal that as long as an insurance doesn't base their allowance on our billed charge (ie a % of our billed amount) we are not obligated to charge them above the insurance allowance. We would ofcourse be charging them the deductible/coinsurance based on the insurance but do not necessarily have to bill past the insurance allowed.

Now if we do this as a rule (meaning regardless of whether its an MNRP plan or RNC plan) and provide notice to insurance company (like in box 19 of claims) would this be ok or would this be a compliance issue.
Many laws are state specific

So, you would be billing patient for insurance applied deductible and/or co-insurance, just not balance billing if I read your question correctly. AND indicating to the carrier that you would accept their R&C amounts.

Our legal advice determined that our original interpretation that NY law permits, but does not require balance billing for out of network providers was correct. However, 1 specific insurance carrier disagreed with that and after a very intense audit, determined that by not balance billing, providers are, over time, inflating what the R&C amounts are. This dragged out over 2 years, and the insurance never saw the interpretation of the law the way we did.

So tread carefully, since even with legal advice, you may have an issue with some carriers. And your state may have specific laws regarding balance billing.

-Christine M. Speroni, CPC
I would defer to others to address the legality of this, but just based on my own experience I would be uncomfortable with this if I were in your shoes. Though there might be loopholes or workarounds to avoid compliance issues, I'd ask a broader question - is this really a sound and ethical business practice? You're essentially saying you're trying to set your fees on a case-by-case basis to maximize what insurance companies will pay but minimize patient complaints. It's sounds a little like you're admitting that your fees are too high but saying that's OK as long as it's the insurance company and not the patient who has to come up with the money. But looking at the bigger picture, those insurance costs get passed on to everyone who pays premiums - you might benefit in the short run but these practices impact everyone and in aggregate inflate the costs of healthcare. Also consider that patients can have very different deductibles - you've said you'll bill patients their cost shares, so this could result in different patients being responsible for very different amounts for exactly the same services. Though it might be well-intended to help patients, is it really a fair business practice to be discounting some patients' bills more than others, and how will this affect your patient satisfaction and reputation of your practice if word gets out that one patient got a much better deal that another? And as the last post points out, if insurance companies catch on, it could result in a lot of hassle and expense for you too.

I would advocate for a more consistent approach and for setting your fees in way that is reasonable and covers yours costs, and then sticking to that. These are just a few of my thoughts - but I agree that you should 'tread carefully' and consider the unforeseen consequences.
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Thank you for your responses. Before proceeding with any new strategy I wanted to get feedback so I can discuss with my managers. The goal is obviously to help patients but of course avoid any legality issues and pitfalls that come. Thank you for broadening the scope.