Insurance Tips Part III - What the Heck Are Out of Network Benefits (Or how I changed my mind about access to care)

More and more providers are becoming out-of-network providers. What does that phrase mean?

It means that a place has no relationship with an insurance company - there is no contracted rate. 

 What does it mean to have out-of-network benefits?

Some insurance plans provide cost reimbursement regardless of their relationship with your provider - it allows you to have more options for who is providing your healthcare. 

Is there a difference between a "cash-pay" provider and "out-of-network" provider?

The payment system works the same way - you pay your provider directly, but if they are an out-of-network provider they can provide you a superbill to submit to your insurance. 

How do I find out if I have out-of-network benefits?

Me: Do I have any out-of-network benefits? 

Them: Yes - a separate $500 deductible, then services are covered  with a 40%coinsurance, with the same $6,350 out of pocket max.

I was responsible for 40% of the cost of the MRI and there is no contracted rate - you have to ask your doctor for the rate. If they don't specify about the deductible, you have to ask whether the deductible is the same or separate from your in-network benefits. In this case, they were separate, so if I had paid $500 for in-network services, I would have to spend $500 for out-of-network ones before my coinsurance kicked in.

 If reading these scripts is like reading a foreign language, know that you aren't alone.

Until I started working at a physical therapy office where it was my job to verify people's insurance benefits, I had no idea what any of these words meant, and I didn't have any idea how insurance actually worked. What I knew was that I went to providers who took my insurance.

The end.

When I went to PT school, I couldn't understand why people would work as an out-of-network provider. In fact, I thought it was cruel and self-serving and that it priced people out of care.

But when I was looking for a job, I prioritized places that were out-of-network providers. Don't get me wrong; providing out of network (or cash-pay) services absolutely has the potential to price people out of care that they need and that they deserve. But in-network services have their own problems, can still price people out of care, or necessitate compromising quality, and it takes far longer to figure any of that out.

How is that?

(I am using round numbers for ease of math, but will go into actual numbers from my own care in the next post.)

 Say my time, as a physical therapist, is worth $200/hour. If I am not an in-network provider, you pay me $200/hour, and we're done. You know exactly how much it is going to cost per session upfront and that is the cost.

If I am an in-network provider, my time should be worth the same amount, right? Same person, same skills, different setting. But your insurance company won't pay me what I'm worth - they have a contracted rate. There are lots of ways this can be contracted - it could be that each code billed has its own rate, specific to that insurance company. It could be that the insurance company just pays a flat rate for the visit, regardless of how long the appointment is or what treatment is performed. Say they pay me $50 per visit, no matter how long the visit is or what I do. That means I have to see 4 patients within the same amount of time (a one hour period) in order to be able to make up the value of my time.

That’s largely what is happening now - not every place that is an in-network provider compensates that way, but many of them do. Physical therapists will see a patient for 15 minutes, and then pass them on to a tech or an aide to do exercises with them. This allows the PT to see the 4 visits per hour they need to see to make up the cost of their time.

 The places that aren't doing it this way are able to spend more time with their patients because they're being smart about the insurance contracts they take - some places are only taking contracts that pay them $100/visit, which means they only have to see 2 patients in an hour to recoup their costs.

If all you know is what I knew before I started working in the industry - “I need to go to a place that takes my insurance”, then you won't know that people are trading insurance contracts for quality. They are in-network for more places, but have to see a higher volume of patients to get paid. How much individualization do you think you get at a place like that? How much time does the therapist have to provide a treatment plan specific to you and what you need? How happy do you think the therapists are that work at those places when they have to see that many patients per day?