As a general rule, insurance companies want providers in-network and under contract to both reduce their costs and to provide more effective care to their members (aka: fewer visits to the doctor).  In exchange, they will deliver a greater number of patients who are financially incentivized to visit these lower cost in-network providers.  Providers who chose not to be in-network with a payer probably do not really need the deal flow, their affluent customers are fine with using their out-of-network benefit or even paying cash, render low-value services that aren’t really worth billing for given the nature of many high-deductible plans nowadays, or are protected by law to be treated as an in-network benefit even though they are not (ie: emergent care facilities).  

Contrary to popular mythology of the healthcare revenue cycle space, my experience has revealed that the major payers are never really out to try and “get you” but the system in which they are operating under lends itself to inadvertently punishing providers in certain ways. Out-of-network billing is one of the certain ways payers are certainly going to punish providers: 

1. Send payments directly to the patient

‍‍Practices want payments sent directly to them, but payers will not always do this.  Just because a practice may have a signed assignment of benefits with a member on file and have transmitted this information to the payer along with the claim does not guarantee they will honor that agreement.  When a practice bills out-of-network they may claim that their member agreement supersedes any agreements the practice may have made with their member and will start sending payments directly to them.  Collecting payment from patients is vastly more difficult, more expensive, and slower than collecting from a payer which makes this incredibly burdensome. 

2. Mail adjudication results (provider explanation of benefits)

‍Practices need adjudication results sent electronically so data can be easily ingested by their revenue cycle management system, but many times they are instead sent in non-standardized mailings that need manual processing.  Imagine a scenario where a small practice has billed 150 claims to an out-of-network payer for the day and within each claim there exists an average of nine billable services that were rendered to the patient. If and only if billing is set up properly, the payer will respond to this day’s worth of claims for every billed service line which would result in 1,350 services that will have adjudication result information on them.  Each adjudication decision will likely have about 10 data points associated with it from allowable, paid, patient responsibility, and adjustment amounts to remark codes on what they decided how their plan applies to the service.  When added up, a single day’s worth of billing to an out-of-network payer will result in 13,500 data points scattered across a myriad of non-standard payer responses that need to be entered into a system that can make a decision on what next steps will be needed to perform.  Certain out-of-network payers will never electronically send these data leaving the burden of manually recording to the practice (if they have the bandwidth to do it at all).

3. Launch an undead army of yes-man doctors to second-guess all care decisions with a goal to deny for medical necessity

‍Out-of-network?  Get out of town. Payer’s don’t have an established relationship with the billing practice and will treat each of its claims like a vespa-driving new guy walking into a dive-y biker bar.  If the claim value is large enough they will unleash their undead horde of medical doctors to question every medical treatment rendered.  Practices must be prepared to fight in court every medical necessity denial.

4. Unleash a third party administrator (TPA) to negotiate tooth-and-nail every single claim until the practice bends the knee and globally settles

Multiplan and Zelis are some of the biggest names in the game and do a great job of bludgeoning a practice with a negotiated settled rate.  This negotiation process will continue for every. single. claim. that results in delayed payment and expended resources until (they hope) a practice agrees to a global settlement which is sort of a cost-mitigating pseudo in-network contract. Practices should decide if they want to play this game or go to court and file complaints. Sometimes to win the game is to not play it.

5. Send payment via a virtual prepaid debit card by fax or a check by mail and deny or ignore Electronic Fund Transfer (EFT) enrollments.

This is by far one of the more annoying problems of billing out-of-network payers - many will not enroll in ACH payments even though they offer a process to do it.  Or even worse, they will claim to be enrolled but will continue to send physical payments for a subset of their members as a result of some software glitch from a previous internal acquisition of theirs. Physical payments are burdensome because they are oftentimes lost in the mail, sent separately from the Provider Explanation of Benefits (PEOB) making it difficult to correlate back to an adjudication result, or are sent by fax in the form of a prepaid debit card requiring the practice to have card-processing capability and obligating them to eat the interchange fees card networks and their acquirers impose (2.9% + $0.30 starting).
‍

Ultimately taking a software-first approach to these problems is the only way to prevent lost, forgotten, and stalled claims from slipping through the cracks.  Partnering with Enter, who has taken this approach from day one for each and every one of these problems insurance payers have created, has proven to dramatically improve payments and collections.