Have you ever submitted an out-of-network claim and only received back pennies on the dollar?  Out of network claim reimbursement has recently been re-evaluated by insurance companies. 

Many insurance carriers are beginning to rethink their out-of-network payment methodology.  It seems that the 70^th, 80^th and 90^th percentile of the Usual and Customary (U&C) amount is becoming a thing of the past.

Carriers are moving away from U&C and looking to pay out a percentage of Medicare.  By doing this, insurance companies are utilizing Medicare’s published rates and for the most part, paying out anywhere from 10% to 50% above these rates.

For the moment, reduced out-of-network reimbursement based on 110% to 150% of Medicare is intended for the insurance company to:

1)  Obtain greater member in-network utilization; in-network providers are paid at an agreed upon negotiated rate

2)      Grow their network due to the insured’s greater in-network utilization

3)      Obtain a greater number of providers who agree to participate in the network by making out of network services cost prohibitive to members, thereby depleting the out of network doctors’ patient base

4)      Keep health benefits affordable and control cost    

Below is an example of the “previous fee schedule” vs. “a % of Medicare” based on a deductible that has already been satisfied and 30% coinsurance which is the responsibility of the insured:

The grid above is based on information provided by United Healthcare/Oxford Health Plans

The direction in which carriers appear to be headed is to allow the client to choose, at what level of Medicare, they will be reimbursed (i.e. 150%, 200%, 250%, etc.).  Payment based on 230-240% of Medicare should be equivalent to the UCR at the 70^th percentile.