Published 6/1/2015

Leveling the Playing Field for Out-of-Network Providers

Leslie Howard, Esq.

By definition, a “level playing field” is about fairness, a system in which all players abide by the same set of rules. This system requires transparency and consistency of the rules, their definition, and their interpretation. The rules should be outlined in a playbook that all players can access and understand.

Unfortunately, for out-of-network (OON) providers in today’s medical reimbursement world, the field is sorely off balance.

The players
First are the insurance companies. For the most part, insurers are corporate giants with deep pockets that have mastered the art of creating processes on top of processes. A web of red tape often causes both insured individuals and providers to feel stuck and out of control.

Then there are the providers—those who are part of the insurer’s network as well as those who are not. Being an OON provider carries with it huge risks and daily unknowns. Physicians are trained to treat patients, not necessarily to run a business. Yet they must regularly face off with insurers on matters that directly affect their bottom line.

The result? The claims auditing and appeals process becomes overburdening. Without knowing the specific plan outlined in a patient’s summary plan description (the playbook), providers are unable to take action against claim reimbursements that are unfair and sometimes even downright insulting. Even a large practice rarely has the internal ability and resources to effectively manage this process.

The playbook
Every health insurance plan has a summary plan description that is provided to the insured at enrollment. In most cases, the insurer alone interprets and executes the terms in the summary plan description and controls the claims process. The insurer, therefore, determines the level of difficulty, clarity, and consistency of each claim.

The language in a summary plan description is typically ambiguous, unclear, and open to interpretation. Terms such as “usual and customary” and “allowable amount” are examples. What is “usual and customary” and who determines that? Who determines the “allowable amount” and when can it change?

This keeps claim negotiations one-sided because the insured person rarely keeps or reads the document, and providers only have access to it if the insured gives them the right. If providers do not see the summary plan description, they are unable to determine whether what the insurer is offering is outside the scope of what is fair for each claim.

Leveling the field
Most insurance policies are governed under ERISA (Employee Retirement Income Security Act), and therefore have strict regulations regarding disclosure of terms and administration of policies. Specifically, ERISA guarantees each insured a full and fair review of plan documents and all evidence, methodology, and fee schedules relied upon to determine the reimbursement amount. OON providers can receive more, if not all, reimbursements in accordance with each insured’s policy by taking a systematic approach and working with the law under ERISA for each claim.

A critical starting point is to ensure that all patients sign a Designated Authorized Representative (DAR) form on their initial visit. This allows the provider to “step into the shoes” of the patient. Without a DAR, providers have no rights, because health insurance is a contractual agreement between the insured and the insurance company.

Once the patient signs a DAR, however, the provider has all the rights and protections afforded under the patient’s policy and the law. By exercising the insured’s rights under ERISA, providers are able to appeal, negotiate directly, clarify terms, and ultimately hold insurance companies to the fairest interpretation of the summary plan description possible under the law.

Providers must then exhaust the written appeals process. This process includes all the administrative remedies required before a claim can move to litigation. It is a tedious process complete with red tape, denials, and delays, that can take 6 months or longer. Many providers and insureds may give up and accept whatever they are offered at this point, usually well below what they are entitled to receive.

Legal intervention begins with a request for the summary plan description. ERISA requires that this document be provided on request, and fines may be levied for refusing or delaying in doing so.

Once the provider receives a copy of the summary plan description, a careful analysis can identify language to be challenged and proven inconsistent. It is these inconsistencies, ambiguities, or buried promises that can lead to a clarification of the terms, a reevaluation of the current payment, and ultimately a favorable result. Claims can often be settled prior to litigation with demand letters. Filing a lawsuit is a last resort, but it may result in a settlement in the early stages of litigation.

No pain, no gain
Although these recommendations sound simple, they can be difficult and sometimes impossible for busy medical practices to implement. Historically, insurers have realized this and brought in outside help. In many cases, providers can consider doing the same. A designated resource who works specifically on the claims auditing and appeals process and insurer negotiations can keep things moving to a favorable outcome and ultimately leave much less money on the table.

The only constant in today’s medical climate is that things continue to change. Keeping up with the changes and staying on top of claims processes are critical to maintaining a successful practice.

Leslie Howard, Esq., is a founding member of The Law Offices of Cohen & Howard, LLP, a New Jersey–based firm that provides medical professionals with assistance in handling insurance-related claims, as well as consulting on healthcare revenue and work flow management. She can be reached at lhoward@cohenandhoward.com