Today I want to address one of the most frequently misunderstood credentialing concepts in outpatient healthcare practices today. Your network status.
Everyone seems to have different nicknames for this, so just to make sure we’re on the same page, I’m referring to providers being contracted with, enrolled in, or participating in an insurance plan.
Figuring out whether you should bill an insurance payer as an in network or out of network provider is a situation that involves several important variables. You shouldn’t send an application for enrollment to an insurance payer just because a lot of your patients have that insurance.
No need to fear on this. I’m going to walk you through everything.
Some Insurance Payers don't Deserve Your Name on their Panel
When you enroll with an insurance plan, you are applying to be a provider in their network, entering into a contracted agreement with them. Within some insurance plans, you may be offering a piece of your revenue, or even a piece of your soul in my opinion.
I can’t tell you which insurance payers are the best and worst to enroll in. This is due to several reasons. First, insurance payers like Blue Cross Blue Shield have different entities in each state. They may be affiliated, but the Regence giant is really just an umbrella made up of different organizations that have different operations and regulations. The Blue Cross Blue Shield of Utah certainly is not the same as the HMSA of Hawaii, even though they’re affiliated cousins.
Another reason is that every insurance payer may be loved or hated depending on the healthcare specialty in question. For example, a lot of physicians hate working with United Healthcare, but I’ve spoken with lab and DME directors who claim UHC to be their biggest and best payer.
Pros + Cons, In-Network, Out of Network
Let’s go over some general pros and cons of being an in-network provider and an out of network provider. Keep in mind that every insurance payer is different, and within that payer there are different plans, so not every pro and con will be applicable. Take this information as food for thought, and you’ll be the judge on what insurance plans are worth your time applying for.
Pros of being In-Network:
Being in-network, should you be accepted, means you’ll be what I like to call the club member. Your practice information will be placed on the insurance payer’s ‘Find a Doctor’ website page, where patients search for local providers of filtered specialties like yours. In other words, being in-network can be a marketing perk. This is because patients most often seek providers that will be covered under their in-network benefits plan.
Being in-network can mean less medical necessity letters will be requested as well, making your life easier.
Cons of being In-Network:
When you agree to that contract, you’re agreeing to receive reimbursements from the insurance payer under their terms. That means you’re limited to the payment rates that they set. That contractual adjustment that you see on EOBs limits you to the insurance payer’s ‘allowed amount’, thus leaving you with a reduction on your reimbursement that’s often large, sometimes paying only half of what you charged, sometimes less than half.
Another con is the maintenance involved. Some insurance payers will not only lay out a long, tedious enrollment process, but they will require frequent attestations and re-credentialing. These can carry deadlines that will result in halted payments, should you not fulfill them in a timely manner.
Maybe you’re already aware, but for some specialties, it can cost a decent sum of money to enroll in insurance plans.
PROS of being Out of Network
Being able to charge what you want for your services can be a big win. I’ve met some providers who only do out of network billing because they’ve found what insurance payers will pay well. Some providers rely on larger payouts that are only possible when billed out of network, just to be profitable.
Cons of being Out of Network
Some patients may not have an insurance plan that carries out of network benefits for certain specialties. In some cases, patients’ insurance plans don’t have any out of network coverage.
How to Benefit from Both In-network and Out of Network
As I’ve mentioned, these pros and cons vary in their application. Not all of them are relevant for every insurance plan and every healthcare specialty. So how can providers reap the benefits of the pros for in-network as well as the pros for out of network billing?
First, start a new business entity. The beauty of capitalism allows individuals to start a new LLC businesses within hours. Next, setup a new group NPI in NPPES that’s linked to your new business tax ID number. This doesn’t take much longer either. Then you’re going to add your new business, or should I say practice, to your billing practice management software. You now have two legal practices that are registered to the same location. You don’t actually have to change anything tangible, this just gives you the ability to pick and choose when you want to bill in-network or out of network.
Okay, let’s elaborate on how this actually works. Let’s call your original practice, Practice A. You’re going to enroll Practice A in every insurance plan that you’re currently billing, or at least the ones that you like. We’ll refer to your new practice entity as Practice B. You’re not going to enroll Practice B in any insurance plan. Practice B will only bill on an out of network premise. Let’s say a patient comes in with an Aetna insurance plan, this insurance plan only has in-network coverage. So you would bill this Aetna plan as in-network from Practice A. Another patient comes in with a different Aetna plan. This plan does carry out of network benefits, and the deductible isn’t too high. You will bill this plan as out of network from Practice B. Starting to catch on? What I’m saying is that this strategy will actually give you options on how you want to bill?
Your Billing Must Match your Enrollment
Regarding the actual claims you’re sending, the only thing you will usually have to change on the claim is the Billing NPI and practice information in box 33. If you ever have an issue having the same billing address for both practices then there are still options. Some providers use their house to receive payments, some lease a small office space. Remember that the billing address, often considered the ’pay to’ address does not have to match the practice location in box 32. This may seem more complicated for larger practices but having the ability to do this will open up larger revenue opportunities in the long run. Find a way to make this work!
Beware of Auto Payer Contracts
One last matter to watch out for is hidden auto payer contracts. If you’re a provider that bills auto carriers, PIP, liability- doesn’t matter, then keep an eye on your reimbursements. Not long ago I was going through an Orthopedist's EOBs and noticed that State Farm had underpaid on everything. This was odd. For years they had been paying the full charge amount. Then I saw it, a contractual adjustment. They were now paying under an enrolled contract. I researched the dilemma and found out that when the provider had recently enrolled in Coventry, a healthcare payer, there was an opt-in term that included contracting under State Farm. It was practically hidden, very easy to miss.
This is one example of other auto payers that are partnering or merging with healthcare insurance payers. Does this mean you shouldn’t be able to bill in-network with Coventry in order to avoid the contract with State Farm? Not necessarily. If you prefer to bill Coventry as in-network, you can do so by billing from Practice A. Just make sure that when you bill State Farm or other auto payers in the future, you do as out of network from Practice B.
Ask Around for Advice
Remember, if you’re unfamiliar with an insurance payer’s reliability and reimbursement, asking other practitioners of your specialty can help greatly. Make sure that you get more than one opinion though. I know plenty of providers who hate working with Medicare, but haven’t actually billed a single Medicare claim in years. Medicare has definitely evolved and for some, it’s a very reliable and consistent payer. So don’t believe everything that others tell you. The great news is that you can now take the risk of enrolling, because if it doesn’t work out, you can still bill out of network from Practice B.
As always, contact me on my website if you need more guidance on this. Don’t procrastinate on this. You’ll only lose more money doing so.
Comments