The Pros and Cons of Leaving Insurers’ Provider Panels
More and more physicians are examining whether they should remain on an insurance company’s provider panel. Some physicians are realizing the benefits of becoming an out-of-network provider rather than remaining on the insurance company’s provider panel. The major benefit of being an out-of-network provider is the reimbursement rates are higher plus the physician avoids the billing and payment headaches. However, one must examine the risks as well.
- Often out-of-network providers have better reimbursement rates than comparable in-network rates.
- The practice avoids the time and expense of submitting claims and fighting over reimbursements.
- The patient may value the more direct contact with the practice biller without an insurer intervening.
- Plan enrollees using a nonparticipating provider often have higher deductibles, copays and coinsurance payments.
- Being on an insurance panel and being in the plan’s provider directory may be a good source of new patients. New patients may not be able to find you without being on their panel.
- Some contracts have anti-assignment clauses requiring reimbursements go first to the patients. Patient collections may be difficult and unpleasant if a patient receives the reimbursement first.
- Existing patients may leave if you no longer are on an insurers’ panel. It may also cause confusion with existing patients.
The Legal Issues
There are also legal issues to consider in changing your status and becoming an out-of-network physician.
- Must you inform patients of the change in status? The general consensus is yes, even though some may leave the practice.
- Many states, as well as Medicare, have prohibited balance billing (the practice of billing patients for the difference between a health care plan’s payment and a physician’s full charges) by in-network providers. But, in general, they do not apply this prohibition to out-of-network physicians. Medicare does impose a 15% cap on balance billing by “nonparticipating” physicians.
Without a contract, most courts impose a reasonableness standard on payment amounts. Some courts have held that a plan cannot unilaterally pay an out-of-network provider the same amount he or she previously received when in-network. Moreover, most court decisions have supported a payor’s refusal to honor an assignment of benefits to an out-of-network provider.
Proceed with Caution
Before leaving an insurer’s provider panel, seek advice from both your legal counsel and your peers. For additional help, contact Nicki Chalik at 312.670.7444.