According to a recent research study conducted in the United States, healthcare costs are rising, and many patients are opting for out-of-network (OON) providers for their healthcare. While OON services may provide patients the flexibility and choice they desire, they often result in higher out-of-pocket costs due to insurance companies not fully covering the expenses.
This trend has created a challenge for patients and providers as they struggle to navigate the complex process of handling OON claims. As such, it is crucial for healthcare providers to understand the intricacies of handling OON claims to ensure that their patients receive the care they need while minimizing the financial burden on both parties.
Patients are choosing out-of-network (OON) providers due to increasing healthcare costs. Insurance companies do not fully cover OON services, causing difficulties for patients and providers alike. Rising healthcare costs lead to more patients seeking care outside their insurance network. Insurance companies often fail to fully cover the costs of out-of-network services, creating a challenge for patients and providers. Opting for out-of-network providers is becoming a standard solution for patients facing high healthcare costs.
What Is In-network?
In-network refers to healthcare providers with a contract with your health insurance plan. These providers offer medical services to plan members at a pre-negotiated rate, resulting in lower cost-sharing.
What Is Out-of-network?
Out-of-network healthcare providers do not have a contract with your health insurance plan. Consequently, healthcare services may cost more since your health plan has no pre-negotiated rate.
What Are Out-of-network Claims?
Out-of-network claims are medical bills submitted by providers without a contract with the patient’s insurance company. Patients may seek treatment from a specialist or facility not covered by their insurance network, resulting in out-of-network claims. Insurance companies usually cover a smaller percentage of OON services, and patients may be required to pay a higher share of the cost.
In-network Vs. Out-of-network Rates
In-network and out-of-network rates refer to the cost difference between using a medical provider within or outside your health insurance plan’s network. To illustrate, consider the hypothetical scenario of being hospitalized for three days with costs of $12,000 if in-network and $20,000 if out-of-network.
When using an in-network provider, the insurance plan will typically cover a predetermined percentage of the cost, ranging from 70-90%. For instance, if the insurance plan covers 80%, your responsibility would be $2,400. However, with an out-of-network provider, the insurance plan will typically cover a lower percentage of the cost, ranging from 50-70%. Using the same hypothetical scenario, if the insurance plan covers 60%, then your responsibility would be $8,000. Therefore, choosing an in-network provider can lead to significant cost savings, such as saving more than $5,000 in the above scenario.
To Summarize:
| Type of Provider | Cost of Hospital Stay | Percentage Covered by Insurance | Your Responsibility |
| In-network | $12,000 (discounted) | 80% | $2,400 |
| Out-of-network | $20,000 (full price) | 60% | $8,000 |
Why Does Out-of-network Provider Care Cost More?
Out-of-network care is typically more expensive because providers not within your insurance plan’s network don’t have a pre-negotiated discount rate with your insurer. This means that if you choose to see an out-of-network provider, your insurance company (or you) will be charged the full price of their services.
In contrast, in-network providers have established partnerships with your insurance company and have agreed to provide services at a lower, negotiated rate. In exchange, these providers are more likely to be visited by people with coverage from that insurance company.
What Makes Out-of-network (OON) Claims Challenging?
Handling out-of-network (OON) claims can be challenging due to the complexity and time-consuming nature of the process. Providers are faced with various issues, including negotiating rates with insurance companies, understanding the billing process for OON services, and appealing denied claims. This can be particularly difficult for small practices lacking the resources to handle OON claims effectively.
Here are some points to further explain the challenges of handling OON claims:
Negotiating rates with insurance companies:
Unlike in-network providers who have pre-negotiated rates with insurance companies, OON providers have to negotiate rates themselves. This can be a time-consuming process that requires knowledge of the insurance industry. If you do need to see an out-of-network provider, try to negotiate the cost of services beforehand. You may be able to work out a payment plan or a discounted rate.
Understanding billing for Out of Network Providers:
Billing for OON services is different from billing for in-network services. Providers must understand the billing process for OON claims, including how to submit claims and what information needs to be included.
Appealing denied claims:
OON claims are more likely to be denied, meaning providers must be prepared to appeal denied claims. This can be a time-consuming and complicated process that requires knowledge of insurance policies and procedures.
Lack of resources for small practices:
Small practices may not have the resources to manage OON claims effectively. This can lead to delays in payment, increased administrative costs, and frustration for providers and patients.
Tips To Handle Out of network Claims And Maximize Reimbursement
Here are some tips to help handle out-of-network (OON) claims and maximize reimbursement:
Verify insurance coverage:
Before providing services to patients, verify their insurance coverage and determine whether they have out-of-network benefits. This will help you understand what services will be covered and the patient’s financial responsibility.
Discuss costs with patients:
Make sure to discuss the cost of services with patients before providing them. This will help patients understand their financial responsibility and avoid any surprises.
Document thoroughly:
Document all services provided and the rationale for any OON services. This documentation will be essential if a claim is denied or you need to appeal a denied claim.
Bill accurately:
If you’re submitting an out-of-network claim, provide all necessary documentation, including receipts, invoices, and a detailed explanation of the services received. Make sure to bill accurately and include all essential information on the claim form. This will help ensure that the claim is processed quickly and accurately.
Appeal denied claims:
If a claim is denied, appeal it promptly. This will increase the likelihood of the claim being approved and can help maximize reimbursement.
Negotiate rates:
Consider negotiating rates with insurance companies to help maximize reimbursement for OON services. This can be time-consuming but can result in higher reimbursement rates for your services.
Consider joining a network:
If you frequently provide OON services, consider joining a network to help streamline the billing process and maximize reimbursement. Joining a network can also help increase patient referrals and improve your practice’s visibility. Get a referral from your primary care physician before seeing an out-of-network specialist. This may help your insurance company cover some or all of the cost of the visit.
Maximizing Out-of-Network Payments for Healthcare Providers With I-Med Claims
When dealing with out-of-network (OON) scenarios, one of the significant challenges for healthcare providers is when the insurance company sends payment directly to the patient instead of the provider. This can create a situation where providers must work to recover this money from their patients, which can be complex and time-consuming. It is essential to make systemic changes to prevent this outcome and ensure that payments are made directly to the provider.
I-Med Claims is a healthcare revenue cycle management company specializing in maximizing out-of-network (OON) claims payments. With over 20 years of experience in the industry, we have developed a deep understanding of the complexities of OON billing and reimbursement. Our team work with healthcare providers to navigate the OON landscape and ensure they receive fair service compensation.
To maximize payments on OON claims, I-Med Claims first negotiates higher rates with insurance companies on behalf of their clients. This helps ensure that providers are compensated fairly for their services, even when treating patients outside their network. Additionally, we use advanced technology to identify errors and discrepancies in billing, which can lead to denied or underpaid claims. They also provide comprehensive support for the appeals process, helping providers fight against denied claims.
