Protecting your right to see out-of-network providers

Health Benefits Report

By Kevin Lyons

Last month, we touched on the topic of high-value providers that you can access by using tools such as AMINO. Ironically, while I was writing that article, actions by the state’s third-party administrator to completely undermine the compensation of out-of-network providers in the plan were underway.

In a PPO plan, you have the choice to use out-of-network providers, who are paid on a different index than the in-network providers. Plans are designed to encourage in-network utilization through deductibles, coinsurance and copays. For instance, in-network providers are usually accessed through a lower co-pay (as in Direct 10, a $10 office visit). If you choose to utilize an out-of-network provider, then you must pay a deductible (in Direct 10, the first $100 every year) and then co-insurance (20 percent of the usual and customary cost for a service, up to a maximum of $2,000 out of pocket). The plans are designed this way to incentivize in-network utilization, which is supposed to be less expensive, but the fact of the matter is that this isn’t the truth.

The third-party administrators have negotiated contracts with providers in their networks. In many cases, they are very high-cost providers and far surpass what the payment for the out-of-network providers get paid. When questioned on in-network reimbursement rates, the third-party administrators will tell you that they cannot disclose their payment arrangements with the providers because there is a clause that they have put in the contracts that does not permit the providers to disclose their arrangement. I have and still find this to be one of the dirty little secrets of the State Health Benefits Plan. What other recipient of a $4 billion contract does not have to disclose how much of the taxpayers’ money is paid to contracted providers?

Now, the latest issue: Horizon recently sent a letter out to all the out-of-network providers saying that if they did not sign an “attestation” that they would collect the coinsurance and deductible, they would be paid a lower rate than that determined by the Plan Design Committee. They seemed to have forgotten that Chapter 78 gave the Plan Design Committees the sole authority to set these rates. Once again, an overreach. The fact of the matter is that the Division of Banking and Insurance does have the authority and, I believe, the responsibility to enforce the collection of deductibles and coinsurance, but they choose not to allocate the resources to do so. I have stated on several occasions that the providers must follow the plan design or they could be considered to be engaging in fraudulent billing. For a contractor to undertake this initiative unilaterally shows complete disregard for the legislature and its intentions.

We hope that this was not done to force independent practitioners who have chosen not to work for the hospitals and insurers to get swallowed up and take away the ability of our members to see practitioners who are independent if their health situation requires it.

As of the time of this writing, we have been successful in having the initiative by the administrators stopped. We will closely follow the actions of the state and the treasury to make sure they are acting in the interests of our members, rather than the insurers and administrators.