Out-of-network is complex. With the right approach, however, providers can significantly improve reimbursement rates, financial results, and the bottom-line.
John F. Bartos, CEO of Collect Rx, recently delved into the potential out-of-network opportunities and the roadblocks payers and vendors put in place that make it challenging for providers to receive fair reimbursement. Collect Rx is dedicated to helping providers obtain higher out-of-network reimbursements.
Health insurance companies employ various tactics to reduce providers' out-of-network payments. Payers reduce provider payments in two ways:
1. Individual bill reduction to control out-of-network reimbursement. According to Mr. Bartos, vendors use various tactics to reduce out-of-network payments on a case-by-case basis.
• One tactic used by the payers’ vendors is to negotiate a settlement in exchange for the provider agreeing not to balance bill the patient for the discounted amount. In other words, the insurance company tries to negotiate fees after services are provided and after the patient leaves the facility, but before the insurance company makes a payment. Typically, they fax a proposed settlement offer to you, often with a short turnaround time.
• A second tactic is to simply re-price the bill down to “reasonable and customary” which is typically close to the Medicare rate. In other words, the insurance company re-prices the out-of-network bill down to 50% or less of billed charges based on their determination of what is “reasonable and customary.”
Most health insurance companies have a wealth of resources at their fingertips and can pay a handsome fee to vendors if it ensures they save big on provider payments through these bill reduction tactics.
2. Reducing out-of-network payments to providers on a global basis. Vendors for health insurance companies use third party rental network agreements to reduce out-of-network reimbursements on a global basis. Third party rental network agreements are signed not with an individual payer, but with a third party that contracts with a lot of payers. They serve “middlemen” of sorts, bringing together payers and providers to participate in contracts that often are not favorable from a provider perspective. Moreover, they are often offered to other payers and networks that the provider doesn’t even know about, so-called Silent PPOs.
“Because they sound so easy, many providers don’t realize these agreements contain numerous provisions that negatively impact reimbursements,” according to Bartos. Some examples are:
• Is the health insurance company required to price all bills pursuant to the contract?
• Are reimbursements based on a percentage of the lower allowed charges, not the higher billed charges?
• Does the health insurance company apply in-network discounts with out-of-network benefits?
It’s important to get help to understand common issues and misperceptions regarding these agreements.
How to win your appeals
Many providers send a simple form letter to payers when sending in appeals, which is simply not enough to change a payer's stance and increase your payment. Bartos outlines the following steps to ensure success in your appeal's process:
• Make sure you have the documentation necessary to handle the claim.
• Reach out to payers to verify the patient and billing information.
• Employ a strategy that takes into account the right facts to present.
• Engage with payers. Call your payers nearly every day and escalate when necessary.
• Don't forgo the follow-up. When you successfully winning an appeal, ensure the insurer follows through with the payment.
• Craft a well-drafted assignment of benefits.
How to maximize individual case results
A key to maximizing individual case results is data. This includes data relating to insurance policies, comparable data, and tracking the trends and tendencies of the vendors and insurance companies. Collect Rx created CRXIS™ Business Intelligence Engine to help providers succeed in their out-of-network payments. The tool aggregates data from hundreds of customers to effectively identify holes in payers' data. Bartos referred to the engine as an "internal data and analytics tool that helps us when we go toe-to-toe with insurance companies in reimbursement."
Many providers should consider outsourcing to companies well-seasoned in the reimbursement arena. Even if a provider has the skill, expertise, and data to be successful with out-of-network reimbursements, they often don’t have the time. “Being successful with out-of-network takes time and focus,” said Bartos. “Most billing offices are too busy with their other issues to give it the attention it deserves.”
The out-of-network opportunity
"The key for providers is to figure out how to maximize the out-of-network opportunity,” according to Bartos. As providers survey the landscape today, there are not many opportunities to improve reimbursement rates. There is limited, if any, opportunity to increase in-network rates. There is no opportunity to increase Medicare and Medicaid rates. Increasing out-of-network reimbursements represents a last, great opportunity for many providers to bring more dollars in the door.
This article is sponsored by Collect Rx.