Out-of-Network Reimbursement: 3 Things to Know
Out-of-network reimbursement has completely changed during the past several years. We searched over 40,000 out-of-network payment data files released by major health insurance carriers to identify current trends.
#1: Covered OON Services Vary by Plan & Market
Health plans have difficulty securing in-network coverage for different types of services in different markets. Sometimes health plans do not have in-network providers to furnish all the minimum essential health benefits required under the Affordable Care Act. Health plans are inclined to pay out-of-network (OON) providers for minimum essential health services that are lacking in their network (i.e., mental health services).
Certain self-insured employers, like J.P. Morgan & Chase, have made bold public commitments to provide employees with access to mental health treatments without copays or deductibles. OON data for the J.P. Morgan & Chase health plan reveals its employees make good use of a broad array of mental health benefits nationwide.
Most Commonly Reimbursed OON Services by Health Plan
UHC/NY State Insurance Program:
- Ambulance
- Physical therapy
- Physician E&M
UHC/TX Provider Network:
- Ambulance
- ED physician visit
- Inpatient physician E&M
Cigna/JP Morgan & Chase National OAP Health Plan:
- Inpatient alcohol & addiction services
- Inpatient psychosis
- Psychotherapy
Kaiser Southern & Northern California:
- Emergency room – facility
- ED physician services
- CT scan
- Lab services
Top 20 Covered OON Services for 6 Health Plans
#2: Many Providers Set Their Gross Charges Too Low
Within our OON network data sample, an unusually large proportion of providers are getting paid exactly their billed charges. When insurance pays a provider exactly its billed charges, this usually means insurance is paying the lesser of actual billed charges or usual, customary and reasonable charges (UCR).
For example, assume an out-of-network therapist charges the J.P. Morgan & Chase health plan $125 and gets paid exactly $125 for a 45-minute psychotherapy session (90834). It turns out UCR was $350, and the third-party administrator paid the therapist the lesser of $125 (billed charge) or $350 (UCR). The therapist could get paid $225 more per OON visit simply by raising gross charges above UCR. The TPA is not likely to inform the therapist of this, and there is no fee schedule for out-of-network providers.
Allowed Amount vs. Billed Charges: Cigna/JP Morgan & Chase Health Plan
98034: 45 Minute Psychotherapy Visit
#3: Covered OON Services Are Limited for Most Health Plans
We searched over 40,000 out-of-network payment data files released by major insurance carriers under the Transparency in Coverage rule. We only found a few health plans in the whole country that are consistently covering more than a few dozen services on an out-of-network basis.
Few employers offer OON benefits anymore, and the No Surprises Act has effectively put a coffin nail in the practice of balance billing. The roulette business strategy of gambling on getting a few big claims with great OON benefits does not appear to be a prudent path for most types of providers going forward. Very few enrollees and providers appear to be successfully filing the appeals necessary to get out-of-network services covered.
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