Is it better for a healthcare provider to be in-network or out-of-network with an insurance company? As a medical billing company that works closely with both insurance payers and healthcare professionals, we are often asked this question. In the state of Ohio alone, whether our customer is located in Cincinnati, Columbus or Cleveland; this question is often a topic of conversation. Though there is not one best answer to this question, there are some basic principles that should be followed.
Healthcare professionals: the in-network versus out-of-network question:
For those readers who are unfamiliar with the topic of in-network versus out-of-network status, please review the links from Blue Cross Blue Shield in Michigan and United HealthCare. However, these descriptions are written from a patient’s perceptive. For a medical provider, there is a different objective or purpose. Insurance reimbursements for services rendered are a crucial piece of revenue for any healthcare practitioner or facility. For example, sometimes healthcare providers may notice that reimbursements rates for in-network health professionals delivering medical services are actually lower than the out-of-network rates. So why apply to gain an in-network status with an insurance provider? Is it better for a physician or psychiatrist to stay out-of-network? Are there any benefits in gaining an in-network status?
There are benefits for healthcare professionals who are contracted as an in-network provider with an insurance company. From a patient’s perspective, an in-network doctor is more accessible due to the fact that healthcare professionals are often found through the insurance company’s online directory. Some patients may always want a medical provider who is in-network so that out-of-pocket cost expenses are reduced. Some insurance plans do not apply out-of-network costs to the deductibles. If patients do not like having to utilize self-pay for healthcare services, they will instead select a contracted in-network provider.
Some individuals are unwilling to pay out of pocket for healthcare treatments or having to wait for the insurance company to send them a reimbursement check. Before healthcare providers choose to be out of network, they should look at their entire situation. Where do they see their practice going in 1, 3 or 5 years? They should understand their practice’s expenses, referral sources and geographical location.
It is possible for patients and healthcare providers to research the quality of services offered by insurance companies. An organization that can help doctors decide with whom they would like to be in-network with is NCQA (National Committee for Quality Assurance). The NCQA actually offers report cards on insurance companies and networks. Their “Report Cards” tab/section will let you sort by provider or network. The report care function also allows researchers to filter by the state when comparing the various insurance companies. For example, here is a list of the four highest-rated insurance plans in the state of Ohio.
As a medical billing company, we work with numerous healthcare professionals and insurance payers. Yet, we realize that not every insurance payer is the same. Some insurance companies are easier to work with compared to others. There are times though, due to past experience and research, that healthcare practitioners may find that they have to stop using a particular insurance provider.
When should healthcare professionals drop an insurance payer?
It is possible to see patients as an out-of-network provider and directly negotiate the fees with the patient. However, this is something that should not be done lightly. A sudden drop in claim reimbursements can quickly disrupt a medical office’s cash flow and overall revenue. Healthcare providers need to look at their practice’s overall profit (basically, revenue minus expenses) and decide if an insurance payer is reimbursing at a rate that will cover both clinical and operational cost. If the amount is too low, accepting reimbursements from this insurance payer is going to damage a practice’s bottom line over the long term. Incidentally, reducing treatment time or increasing the volume of claims can sometimes make up for these lower reimbursement rates. The final decision should be based on what is best for their patients. If doctors are finding that they have to reduce the quality of care, limit the number of patients treated or are experiencing referral issues – it may be time to drop an insurance provider.
At ABCS RCM we will continue to monitor updates and trends about in-network versus out-of-network status for healthcare professionals. For additional questions about this topic or medical billing in general: CONTACT US
In Network, Out of Network.