In the intricate web of the modern healthcare industry, the term "out-of-network" has become somewhat synonymous with confusion and uncertainty for both patients and providers.
The nature of out-of-network billing and reimbursements has given rise to a plethora of misconceptions that often cloud the understanding of this crucial aspect of your billing cycle. By debunking these myths, we aim to empower providers with the knowledge they need to navigate this complex landscape with confidence and clarity.
Myth #1: Being 100% in-network maximizes your reimbursement potential
On average, out-of-network reimbursements are almost 1.5 times the in-network reimbursement rate. A typical surgery center using Wakefield’s Lost Revenue Recovery services generates an additional $127,966 per year in out-of-network payments. Other provider types see similar averages as listed below:
Behavioral Health: $169,752.80
Facility: $209,161.56
Lab/Diagnostics: $158,989.43
Professional: $100,338.53
Remember: these are all averages of additional dollars on top of what they were producing prior to using our services. Whether you outsource with us or try this in-house the point is: there IS money being left on the table with out-of-network claims. And a lot of it.
When you go in-network, you are essentially giving the payer a bulk discount for access to their patients. When you’re out-of-network, you’re no longer giving them that discount, meaning you have a greater reimbursement potential. With the proper expertise, strategy and execution plan, there's an opportunity for providers to increase those reimbursements on these bills even higher.
Our view, and the view of most of providers we service, is that a hybrid strategy puts the provider in the best position to maximize revenue. In other words, we recommend a strategy where a provider goes in-network with some payers and stays out-of-network with others by strategically looking at some key factors. This includes:
- Local payor and employer mix
- Comparable reimbursement levels for their most common procedures
- Relative market share of your practice or center as compared to other providers.
For providers that have traditionally been in-network, our recommendation is a “dip your toe in the water” approach. In other words, don’t go and cancel all your contracts at once. Rather, pick a payer with which your volume is low and start there. See how you do financially over the subsequent 4 to 6 months before deciding where to go next.
Myth #2: My third-party contract covers it
One of the methods used by the insurance companies to lower out-of-network reimbursements is to enter into third party network rental agreements.
Third party rental network agreements are “middle-man” agreements signed with a third party that contracts with several payers.
They sound easy – with one contract you essentially have a contract with all of the payers that are signed up on their network. But these are detrimental to your bottom line.
It’s important to understand who is the customer. To be clear, it is NOT the patient. It is NOT the provider. It IS the insurance company. Think about it - if they’re helping insurance companies SAVE money, who is LOSING that money?
While these agreements may sound attractive, these relationships oftentimes have unintended consequences and should be closely scrutinized. Let’s review the 5 biggest issues that often arise in these agreements:
- Your reimbursements are capped at an unfavorable rate
- The payers are not required to use it, and they don’t when it won’t benefit them
- There is NO patient steerage, despite their sales pitch
- It is virtually impossible to cancel
- You are not the customer
For more information on why these are major problems, read our blog.
Myth #3: We’re doing fine on our own
What most providers fail to realize is that they could be doing better. MUCH better. Put it this way: payers wouldn’t be taking the actions described above to reduce reimbursements if it wasn’t in their best financial interest to do so. Plus, with all the tactics they use, it’s virtually impossible for a typical staff to continuously follow up on every claim.
If you still think you’re doing fine on your own, ask yourself:
- Do you have resources dedicated to appealing out-of-network under-payments and denials?
- Do you have the data necessary to be successful?
- Do you have the process and resources in place to effectively appeal claims?
- Do you have the process and resources in place to audit your activity?
If you’re unsure about even one of them, the answer is you could be doing better.
Don’t let the payers limit your reimbursements. Try the hybrid approach to out-of-network claims!