Out-of-network providers: What’s changing and what you need to know

[WeAAsles]

Beginning June 1, we’re changing our out-of-network reimbursement policy for the new American medical plans. That means that if you visit or use a provider (be it a doctor, hospital, clinic, lab or imaging center) who is out of our network, the company will limit the allowable amount – meaning the amount of fees we will consider to pay the provider – to 140 percent of Medicare’s published rates for that service.
 
Why are we making this change?
Here’s what’s happening: We’re seeing more and more of our employees being charged outrageous amounts for services performed by out-of-network providers. This is unfair to our employees and to American. It is unfair to the employee because often, you aren’t told that you are being sent to an out-of-network provider and your cost share is higher when you use an out-of-network provider. Also some providers are not in-network because they are not high quality providers. And it is unfair to American because our healthcare plans are self-funded (meaning after your co-pay, deductible, or co-insurance is paid, American pays the remainder of the bill). So when American incurs those higher out-of-network costs, those costs get spread across all of the rates the following year (and are one reason the rate jumps are so high from year to year).
Some of this, indeed a large portion of these questionable and extreme billing practices, consists of borderline fraud being enacted on our co-workers. And for those employees with legitimate out-of-network needs, there is a process by which one can achieve that service through a Network Gap process which is explained in greater detail below.
Lastly, a really small number of people are using out-of-network providers today (approximately 5 percent) yet that usage is driving 14 percent of our $1 billion annual healthcare spend. We don’t want to simply pass on the cost to all employees in the form of higher contributions or deductions from your paycheck because most employees are not using out-of-network providers.
And, not all out-of-network providers have questionable billing practices, but it’s done enough for us to need to make a change to the way we handle out-of-network reimbursements.
The good news is more than 90 percent of all hospitals and 80 percent of all doctors in the United States are in-network for our Blue Cross Blue Shield and United Healthcare administrators. These providers include specialists who are high quality and with whom we have negotiated reasonable rates. So the true need to go out-of-network should be limited.
 
What steps can you take?
The best thing you can do for yourself and for your dependents is to become an informed healthcare consumer. That means you should start asking questions before you visit a provider. Confirm with your healthcare administrator (Blue Cross Blue Shield or United Healthcare) that the provider is in-network before you visit and before services are provided. Don’t rely on the provider and don’t assume.
What if you have no choice but to go out-of-network?
Our policy isn’t meant to restrict from the care you need. We’re committed, as we’ve always been, to providing you with quality healthcare. And, that means our plans allow for limited exceptions to the out-of-network reimbursement policy. The Network Gap exception can be requested through your healthcare administrator prior to receiving the care.
And know that if you’re faced with a true emergency, always go to the nearest emergency room, no matter if the hospital is in- or out-of-network. If you have a true emergency which results in an out-of-network emergency room claim, the claim will be paid at 100 percent of billed charges.

http://twu514.org/blog/2015/05/06/out-of-network-providers-whats-changing-and-what-you-need-to-know/

 

[jimntx]

 
And know that if you’re faced with a true emergency, always go to the nearest emergency room, no matter if the hospital is in- or out-of-network. If you have a true emergency which results in an out-of-network emergency room claim, the claim will be paid at 100 percent of billed charges.

 

Baloney.  I had an IOD on layover in Austin last month.  Took 6 stitches to close the wound on my forehead.  Though the company's Workman's Comp insurance eventually paid for all the charges, it started with my group insurance.  I have AA's "top of the line" plan for flight attendants.  (I've never seen the advantage to increasing my deductible by $1000/yr in order to save $10/month on the premium.)  TWU-represented employees may have a better plan, but I would check if I were you before you get hit with some huge emergency room bill that you didn't expect.
 
Turns out, my insurance no longer pays everything except for the $100 deductible.  To start with the deductible is now $800, and I am responsible for 20% of all emergency room charges above the deductible.
 
AFAIK, UMC Brackenridge Hospital in downtown Austin is in-network.  But, it's not like I had a lot of choice in hospitals.  I was bleeding like a stuck pig.  The EMTs took me to the nearest hospital which was UMC Brackenridge.

 

[dfw gen]

how can i buy benefits in November and have the benefits change mid year? hey twu how about doing your job and ensuring any changes occur at the time of purchase instead of the old bait and switch...

 

[WeAAsles]

So you're going to rally behind a care provider being able to continue to charge over 140% of Medicare's published rates and in return charge you and all of us with increased costs for the following plan year?

Basically AA is setting a cap on what it and you in return will accept as a bill. And you have a problem with that?

Oh I really want to hear this argument?

 

[USFlyer]

Basically AA is setting a cap on what it and you in return will accept as a bill. And you have a problem with that?

 
That's not quite correct, based on how healthcare insurance works in general.  If a provider is out of network, the patient is responsible for the full bill.  What this memo says is that the insurance company will only "allow" up to 140% of the Medicare rate.  The "allowed amount" is what the insurance company considers "covered".  Then, whether the insurance company pays some or all of the allowed amount depends on whether the patient has met its deductible and/or out of pocket max for out of network benefits.  For out of network providers, anything over the allowed amount is then a patient responsibility, unless the patient and provider have made alternate arranagements.  For in network providers, anything over the allowed amount cannot be re-billed to the patient as the provider has voluntarily chosen to accept the contracted rate.
 
There is a process to get an exception to the allowed amount calculation for out of network providers.  But, this is typically only granted if there is no other viable in network provider within a certain radius of one's home or temporary location.

 

[WeAAsles]

 
That's not quite correct, based on how healthcare insurance works in general.  If a provider is out of network, the patient is responsible for the full bill.  What this memo says is that the insurance company will only "allow" up to 140% of the Medicare rate.  The "allowed amount" is what the insurance company considers "covered".  Then, whether the insurance company pays some or all of the allowed amount depends on whether the patient has met its deductible and/or out of pocket max for out of network benefits.  For out of network providers, anything over the allowed amount is then a patient responsibility, unless the patient and provider have made alternate arranagements.  For in network providers, anything over the allowed amount cannot be re-billed to the patient as the provider has voluntarily chosen to accept the contracted rate.
 
There is a process to get an exception to the allowed amount calculation for out of network providers.  But, this is typically only granted if there is no other viable in network provider within a certain radius of one's home or temporary location.

Thank you USFlyer. So AA says this

"And it is unfair to American because our healthcare plans are self-funded (meaning after your co-pay, deductible, or co-insurance is paid, American pays the remainder of the bill). So when American incurs those higher out-of-network costs, those costs get spread across all of the rates the following year (and are one reason the rate jumps are so high from year to year)."

So let me see if I get this straight? Essentially it seems like AA is saying that any extra costs (Unreasonable) costs they've incurred in the prior calendar year have been passed onto us in each subsequent year resulting in higher premiums and deductibles? It also seems like they are attempting to reign in those costs so they don't have to be spread out to everyone for those who don't maybe do their homework and ask questions when they are receiving healthcare? 

L-US has lower premiums and deductibles than L-AA. Has this already been a practice employed by US management that has kept those costs lower?

And to answer any possible arguments, no I don't like the idea of having to pay for other people who have utilized the insurance for far more healthcare issues than I have. I also don't think it's unreasonable to question providers about their billing practices.

 

[USFlyer]

It's tough to say.  I've been working in the healthcare industry since 2002, with a particular focus on healthcare billing and collections.  My guess is the insurance carrier was using a "reasonable and customary" rate (aka "usual and customary") that was higher than 140% of the Medicare rate.  Hence, insurance was using a higher allowed amount, which in turn resulted in more being paid on behalf of the beneficiary, which in turn drives up premiums in subsequent years.
 
I personally refuse to use a provider that is out of network or for which there is not some sort of gap agreement in place beforehand.  Using in network providers saves everyone (including the providers who have a much easier time on the collections side) a lot of time, hassle and money.

 

[WeAAsles]

It's tough to say.  I've been working in the healthcare industry since 2002, with a particular focus on healthcare billing and collections.  My guess is the insurance carrier was using a "reasonable and customary" rate (aka "usual and customary") that was higher than 140% of the Medicare rate.  Hence, insurance was using a higher allowed amount, which in turn resulted in more being paid on behalf of the beneficiary, which in turn drives up premiums in subsequent years.
 
I personally refuse to use a provider that is out of network or for which there is not some sort of gap agreement in place beforehand.  Using in network providers saves everyone (including the providers who have a much easier time on the collections side) a lot of time, hassle and money.

Thanks again US. Very good information. I think people also need to be careful if Hospitals bring in an outside specialist to make sure that that specialist also is in their network.

Read a story on FB yesterday where a guy was charged out of network for his wife to have an anesthesiologist brought in by the Hospital. He didn't argue the billing though and just paid it which I guess is another way that we can get stuck on the hook for charges.