Yet Another Out-of-Network Peril
We have previously written about the financial risk of being out-of-network for services. In sum, by definition, an out-of-network provider has no contract with your Plan and thus has no obligation to charge reasonable amounts. When that happens, the insurer disallows most of the fee which then becomes the patient’s responsibility.
We’ve also written recently about the Surprise Medical bill protections that are in place now but these protections don’t apply when one chooses to be out-of-network for services.
A very discouraging but fascinating article was published on the front page of the New York Times on Sunday, April 7th. The article highlights a questionable approach insurers have taken in recent years with their self-insured employer clients. The insurers and an intermediary, MultiPlan, pay themselves a portion of the “savings” when an out-of-network charge is reduced.
Negotiating out-of-network payments is contentious because there is no contract between the provider and insurer and charges can vary widely. There was a brief period where more sanity was applied to the negotiation of out-of-network payments. In 2009, a settlement was reached among insurers and the New York State Attorney General’s Office to create a non-profit called Fair Health which would be a repository for out-of-network payment information insurers could access. Before Fair Health was established, an organization called Ingenix supplied information to insurers but Ingenix was owned by UnitedHealthcare. Unbeknownst to us, the requirement for insurers to use Fair Health which was a part of the settlement expired after five years and many insurers gravitated to an organization named MultiPlan for this service. Whereas Fair Health charges a flat fee, MultiPlan and the insurer take a percentage of the reduction in payment. An egregious example of how this works was mentioned in the article:
A UnitedHealthcare account executive emailed colleagues for help explaining the $50,650 fee charged to New England Motor Freight. The fee grew out of a $152,594 bill, of which just $7,879 was covered.
The article is lengthy but thorough and highly recommended if this area is of interest to you. The article acknowledges that technically there is often the opportunity for a “negotiation” between MultiPlan and the involved provider but that the provider is pressured to accept the offered fee in order to receive timely payment. And the article even quotes former employees of MultiPlan, some of whom allowed their names to be used.
Ms. Young, the former (MultiPlan) negotiator critical of the process, said she had occasionally called a provider from a cellphone – knowing that her work line was recorded – and advised against accepting her own offer.
Self-insured employers and their employees being taken advantage of by MultiPlan and insurers is ironic because those tend to be the country’s largest employers with the most sophisticated Human Resources and Benefits staff and access to outside consultants. We hope the information in this article stirs them to action. Per an update on the issue published on May 1st, regulators are now looking into MultiPlan’s practices.
In the meantime, as we’ve always suggested, if you choose to receive services from an out-of-network provider and you care about money, you must work to understand how the provider will charge and how the insurer will pay. The objective is to try to avoid a provider whose fees are excessive. We know it is difficult work but worth the effort.
