Today, we feature the Out-of-Network Benefits video found at healthcarenavigation.com/videos. The out-of-network benefit is sought after but poorly understood. This results in many individuals having substantial out-of-pocket exposure they didn’t expect because out-of-network providers do not have a participation agreement with their insurer. Of the U.S. healthcare system’s many disappointments, the administration of the out-of-network benefit is one of the most egregious.
Most of the difficulty stems from consumers thinking their coinsurance amount (the percentage the patient owes) pays for a percentage of billed charges. The coinsurance amount is actually based on what the insurer considers to be the allowed amount for that procedure. Below is an example of how the out-of-network benefit would be applied to a $10,000 surgeon’s fee:
Who is to blame for this situation? There is plenty of blame to spread around. Provider charges are often unreasonably high and allowed amounts insurers pay are often unreasonably low leaving the uninformed patient vulnerable. In an era where transparency is a buzzword of our time, there is often no transparency in many of these situations.
Our recommendation to everyone who has out-of-network benefits is to become familiar with your out-of-network deductible and out-of-network coinsurance amount. If you then choose to go to an out-of-network provider for a costly procedure like surgery, discuss with the staff in advance what your exposure is and negotiate an acceptable arrangement. You can conduct some research on your own by asking office staff for the relevant CPT (Current Procedural Terminology) codes associated with that procedure and using that information to research claims data on fairhealth.org, a major repository of private claims data. Also, call your insurer and ask them what the “allowed amount” is for this procedure when using an out-of-network provider and ask them if prior authorization is required. Understand that when you are going out-of-network it is YOUR responsibility to insure any needed prior authorization has been obtained.
Federal legislation addressing surprise medical bills takes effect in 2022. That legislation will provide some protection in emergency situations or situations where one has surgery scheduled in an in-network hospital with an in-network surgeon and the anesthesiologist (whom you likely never met until shortly before they put a gas mask on you) is out-of-network. More to follow as 2022 approaches.
For those who’ve already received staggering bills they didn’t expect, respond quickly and in writing inquiring about the charges to the provider. At the same time, consider filing an appeal with the insurer.
And for all those who are seeing out-of-network providers whose charges are reasonable and reimbursement from the insurer acceptable, don’t let yourself be lured into thinking that is typical.
Finally, we haven’t discussed out-of-network hospitals. Very few people can afford to be admitted to an out-of-network hospital unless they have substantial resources or have negotiated a financial arrangement in advance. Again, if you care about your money, understand your provider network.