Out-of-Network Billing
What Does Out-of-Network Mean?
This phrase refers to physicians, hospitals, or other healthcare providers who do not participate in an insurer’s provider network. This means that the provider has not signed a contract agreeing to accept the insurer’s prices. It is also referred to as a non-participating provider (non-par).
Why do Providers Choose to be In-Network?
The simplest answer is it is easier for patients. They get marketing material from the insurance carrier that lists in-network (participating) providers. Consumers are educated that it is in their best financial interest to see an in-network provider. They are told they will be reimbursed less, have higher out-of-pocket expenses, and may have to file their own claims.
This ‘sell’ to consumers makes it difficult for out-of-network providers to convince patients that they should receive their care from them. Although there may be less paperwork on the front end there is a considerable amount of energy and staff time that must be dedicated to re-educating the patients. Can it be done? Yes.
How do Out-of-Network Providers get Reimbursed?
There are basically two options. The easiest option for the provider is to provide the patient with a “superbill”. This is a detailed receipt of the services that were provided. The superbill will contain much of the same information that would be on a claim form.
The patient would then use this information to submit the claim to their insurance company. In turn, the insurance carrier will reimburse the patient directly. Many providers are justifiably concerned that their patients will be upset if they must submit the claim themselves or pay at time of service. If you chose not to collect at the time of service, you could end up with increasing patient bad debt.
If these are concerns for your practice, then the second option may be right for you. In this option, your practice will submit the insurance claim for the patients. Out-of-network providers can and do bill patients for the remainder of the charges after the insurance company has paid its share. This is called balance billing. Out-of-network providers can choose whether to balance bill their patients. Some agree to accept the insurance payment in full, so patients aren’t financially impacted by receiving care with an out-of-network provider.
Those providers who are in-network are not allowed to balance bill. They have agreed to accept the insurance payment at the rate the insurance carrier has determined as payment in full less any applicable copays, deductible, or coinsurance.
Government health care plans such as TRICARE and Medicare are slightly different. TRICARE requires out-of-network providers to apply to be out-of-network providers before being able to bill. Medicare does not have any out-of-network benefits and you must be an eligible Medicare provider for claims to get accepted.
Even if you are out-of-network with an insurance company, it is still prudent to verify the patient’s out-of-network benefits. This way the patient knows if they have a deductible to meet and you can collect this at time of service (most out-of-network insurance benefits have higher deductibles) before they will get reimbursed by the insurance company.
There is a lot to consider when you are deciding to take your practice out-of-network. It is best to discuss the decision with your entire team and take into consideration how your patients will respond, your competition, and potential financial impact.