HEALTH INSURANCE

Benefits Verification

PreferredMD is the premier Out of Network Health Insurance Verification Service in the country. If your out of network medical practice is looking for a solution to out of network health insurance benefits verification, PreferredMD can solve your problem.

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The most frustrating and time-consuming task confronting medical professionals and patients alike is that of obtaining health insurance benefits eligibility and benefits verification. In addition, the necessary next step once eligibility and health insurance benefits are confirmed, is obtaining prior authorization-precertification for a procedure. The health insurance benefits verification process can be very time consuming and difficult.

Gone are the days when all Oxford plans typically paid the same. Today’s health insurance benefits landscape has a multitude of different reimbursement models, such as Usual and Customary (U&C), Reasonable and Customary (R&C) or “a percentage of Medicare” fee schedules. Variables like ‘maximum out of pocket’ can dramatically change the actual payout of a health benefit claim.

Each of these potential reimbursement models has a different value. It is very important to determine which applies to a particular patient and procedure, in order to accurately inform the patient of their responsibility.

Solutions for
Out of Network Physicians

Many Out of Network Physicians use office staff to call the insurance company to determine the fee schedule for patients with Out of Network benefits. Wait times for health insurance benefits information can vary from 10 minutes to many hours, resulting in wasted time, productivity and diminished quality of patient interactions. Furthermore, the information once the health insurance benefits information is finally obtained, is often inaccurate or at best incomplete.

Keeping up with the changes in third party payers can put significant strain on office staff. Specific training is required for Front desk staff to obtain correct fee schedules, resulting in more lost time. The potential for turnover of trained staff is often an area of constant concern for any private medical practice. How often does your office staff have to stop important work supervising your practice or providing care, to go through training to learn a new process in order for your practice and processes to remain compliant? And then, if they leave? More valuable time and training invested in them is lost.

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We propose better solutions.

Empower Patients with Accurate Out of Network Benefit Information

Most patients are unaware of the details of their health insurance benefits that they or their Employer has purchased, until they make a health benefit claim. That is usually the moment when they discover that all health insurance products are not created equal.

Some patients, however, are very conscious of their in-network options. Limiting their out of pocket expenses for an Out of Network Provider is usually a priority for them. Knowing precisely how a health benefit claim will pay gives them a clear understanding of their responsibility, so they can make an informed decision, and there is no surprise bill.
A proven health benefit insurance verification process will save your practice time and empower patients to make more informed decisions.

A slogan like ‘access to great doctors’ is only truly applicable when their policy provides very good out-of-network benefits – as the Doctors they want to see may not be contracted with their or their Employer’s medical benefits carrier.

That said, not all out-of-network benefits are ‘equal’ either. To clarify: a great plan will be one that pays a Physician or medical facility their Usual and Customary (U&C) fees. Out-of-network benefits which payout at anything short of that may require significantly higher out of pocket payment from the patient.

Here are 3 examples of the typical “Out of network” surgeon fee used by insurance carriers for a typical surgery. A patient will usually have one of these:

  • 140% of Medicare Fee (the percentage may vary from 130% to 150%)
  • 90% U&C (90% of the Usual and Customary fee of the surgeon)
  • 60% R&C (60% of the Reasonable and Customary fee of the surgeon)

The type of “out of network” coverage insurance companies stipulate determines the way Doctors are reimbursed. Patients are responsible for the amount the insurance benefits do not cover.

Using a typical knee arthroscopy as an example: The approved Medicare fee for a knee arthroscopy is approximately $644.74
The Usual and Customary fee for a New York City Surgeon for the same procedure is approximately $12,170 (According to data provided by fairhealth.org)
The Reasonable and Customary fee for a New York City surgeon for the same procedure is approximately $7,800 (According to data provided by fairhealth.org)

Assuming the patient’s deductible has been met, here are 3 examples of the insurance reimbursement and out of pocket expenses using these fee schedules:

OON BillInsurance RateInsurance Payment Patient Responsibility
140% Medicare$12.170$644.74$902.64$11.267
90% U and C$12.170$12.170$10.953$1.217
60% R and C $12.170$7.800$4.680$7.490

It is clear from the above illustration that the out of pocket expense for the patient could be significant depending on the type of out of network reimbursement their Employer negotiated. Your office also benefits from having clear and accurate information beforehand of how the insurance company reimburses for the service. There is less need to collect payment upfront, and your staff can use this information to determine if the patient will receive a balance bill.

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A team that really cares.

The PreferredMD team of specialists can expertly handle the entire health insurance benefits verification process for you. Outsourcing this time consuming and arduous process to our highly trained and experienced team allows you to focus on what really matters to your practice, delivering an outstanding patient experience.

PreferredMd is a secure platform that obtains the patient's health insurance information and provides the relevant reimbursement schedule as well as 25 other elements; such as Deductible and Coinsurance and most importantly a name and reference number for the call. PreferredMD callers provide a report that can be uploaded into the patient’s chart within hours of the request.

This timely and detailed information minimizes the adverse consequences that arise when financial responsibilities are not clear to all involved from the outset. Fast and precise benefits verification will have a positive impact on your patient interactions, collections, and reduce the amount of billing that ages and that may ultimately become uncollectible.

PreferredMD Heath Insurance Benefits Verification service is fully HIPAA compliant and secure. Our online service was built on a blueprint designed for data security, practice convenience and improved patient experience.

Frequently Used Out of Network Health Insurance Benefits Terminology

Benefits Verification
Out of Network (OON) Reimbursement
Reasonable and Customary (R&C) Reimbursement
Usual and Customary (U&C) Reimbursement
Medicare Rated (MNRP) Reimbursement
Deductable and Co-Insurance
Balance Bill

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Frequently Asked Question

How does an insurance company determine how much to reimburse an out-of-network Physician?
Benefits are determined by the out of network benefits of the plan. The reimbursement model varies from plan to plan with the highest reimbursement being the Physician's full billed reasonable and customary fee and the lowest being according to the Medicare fee schedule eg 110% of Medicare.
What does “out-of-network benefits” mean for the patient and the Physician?

Out of Network or OON is the terminology used for Physicians that choose not to participate in an insurance carrier’s network. When a Physician is contracted or In-Network, he or she is bound by the terms and conditions set forth by the insurance carrier. The in-network Physician agrees to accept the payment determined by the insurance carrier. The out of network Physician does not.

For the patient this means that the physician will submit their bill for services rendered to the insurance company and the insurance company will determine what part of that service cost is covered. The payment will be determined by one of the reimbursement schedules:

  • Usual and Customary
  • Reasonable and Customary
  • MNRP

As the insurance company will only pay part of the allowable amount, the remainder of the billed charges will be assigned to the deductible, coinsurance or not covered at all and may be subject to a balance bill.

What is a third party negotiation?
The reimbursement fee schedule for out of network claims differs to such an extent that health insurance companies frequently utilize another company such as data-site or multi-plan to negotiate a settlement for any given claim. This negotiation is based on the physician’s billed amount and the maximum amount an insurance company is willing to pay for the service. The goal of the 3 rd party negotiator is to settle the claim for a percentage of the billed amount. Once the negotiation is signed, the insurance usually pays the negotiated amount within 14 days and the physician makes no further claim to the patient. If a settlement is not reached, the claim is returned to the insurance company for further management.
What is Usual and Customary?
Usual and Customary (U&C) is the reimbursement model that insurance companies use to determine the allowable amount. This is arguably the highest value model and will result in the least out of pocket expense to the patient. It is determined by the data that has been collected by fairhealth.org which was initially set up to track billed amounts for services in distinct geographic regions. Fair health is freely accessible to patients and physicians.
What is Reasonable and Customary?
Reasonable and Customary (R&C) is the reimbursement model that insurance companies use to determine the allowable amount. The reimbursement level is anecdotally not as high as Usual and Customary (U&C) plans.Reasonable and Customary (R&C) is determined by the data that has been collected by fairhealth.org which was initially set up to track billed amounts for services in distinct geographic regions. Fair health is freely accessible to patients and physicians.
What does Medicare rated out-of-network benefits mean?
This is an out of network reimbursement model commonly referred to as MNRP. As the name suggests the medicare fee schedule is the schedule according to which physicians who are participating providers of medicare will be paid. It is this schedule which determines the amount an out-of-network claim pays the physician.
What is the allowable amount?
The maximum amount a plan will pay for a covered health care service. May also be called “eligible expense,” “payment allowance,” or “negotiated rate.” If your provider charges more than the plan's allowed amount, you may have to pay the difference.
What is an EOB?
An EOB or Explanation of Benefits is a written correspondence from health insurance companies to Physicians and patients. Claim details include but are not limited to: date of service, billed procedures, billed amount, paid amount and patient responsibility (i.e. deductibles, and coinsurances).
What is a deductible?
The deductible is how much you pay before your health insurance starts to cover a larger portion of your bills.
What is coinsurance?
Once your deductible is met, Coinsurance is typically a percentage of a medical charge that you pay, with the rest paid by your health insurance plan.
What is a balance bill?
A balance bill is issued to the patient by the Physician for the amount that the insurance company does not reimburse.When a provider bills you for the difference between the provider's charge and the allowed amount.
Why are the charges billed to the insurance company so high?
Insurance company reimbursements vary to a great degree from policy to policy. In many cases reimbursements are unreasonably low. The reimbursement usually does not cover even prorated basic costs such as: malpractice, supplies, equipment and modest basic overhead, much less the massive financial and time investment that most physicians have put into their education and training. For this reason billed charges are high for the potential of an occasional reimbursement in full which would go some way to offsetting the low fee paid out by other policies. This does not seem fair but is the reality in most practices.
Why does the insurance company send a check to the patient?
Insurance companies are not particularly keen on encouraging their customers to utilize their out of network benefits. In efforts to make the out of network experience cumbersome, they will sometimes process the claim payments directly to the patient and not the Physician.
How can I tell if a patient has a good health insurance policy?
There are many health insurance carriers. Each carrier has a variety of plans available in the healthcare market. An overall indicator of a good policy is comprehensive coverage with low out of pocket costs. Many plans are inclusive of wellness and preventive services. The highest ranking plans reimburse Physicians adequately, without exclusions, when using in and out of network coverage.
Why is the Surgeon I work for not in-network with any insurance carriers?
Highly specialized and notable physicians can choose to not participate in health insurance networks. Premier physicians render healthcare services that often exceed conventional practices. These physicians often do not receive adequate recognition or compensation for their services. For this reason, many choose to not participate in health insurance networks.
My patient is concerned that their insurance premium will go up if they use their health insurance.
This is a common belief, but not true. Many complex factors contribute to the ever-increasing insurance coverage premiums. Premiums will increase whether or not you use your coverage.
Does the patient have to pay the deductible in full before the insurance company contributes?
All patients are contractually obligated to pay their deductible in full. Deductibles need to be exhausted before the carrier starts to make payments toward eligible services.
How can my patient tell if there is a daily cap for their insurance reimbursement?
Most carriers provide online access to plan benefits and coverage limitations. They can find information on Daily Cap Limits here. They can also call the number on the back of their card, and speak with a representative in the benefits department, and tell them the type of procedure and place of service they wish to learn about.
My patient is frustrated that so many Physicians are not in-network, how should I explain this?
Many doctors believe in providing great care to their patients which involves spending the appropriate amount of time per case. That can limit the number of patients or cases they can accept. In order to be able do that, and cover their overhead, they have to generate enough income per case. That is not possible given the extremely low reimbursement of many insurance carriers. For this reason, many Physicians cannot afford to become in-network and choose to accept payment directly from the patient or on an out of network basis. For this reason patients have a much better choice of care when selecting out-of-network providers.
Will my patient’s insurance cover the cost of the surgical procedure?
If you are not already using PreferredMD’s Insurance Benefits Verification services, now might be the time to try us out! But, if you are not ready, you can instruct your patient to check their plan benefits documents, check for any exclusions, call the number on the back of their card and tell the representative what procedure they are considering. Some surgeries require prior authorization; in that case, the surgeon must obtain the authorization to ensure coverage. Always have them check with their carrier to be absolutely sure.
My patient is upset that they were reimbursed a very small amount for our Out of Network surgeon’s fee.
When a Physician submits an OON claim, the allowed amount is not easily determined at the time of claim processing. The insurance company may underpay the claim. It is the patient and the provider’s responsibility to speak to a claims specialist to review and reprocess the claim. This often results in an additional payment.
How long will it take for my patient to be reimbursed?
Claims processing timeframes vary from carrier to carrier. On average, an insurance company will complete processing a claim within 30-45 business days.
What does it mean to our patient that our Surgeon is Out of Network?
When an OON surgeon provides services, they will be utilizing your patient’s OON benefits. This means the claim will be subject to the OON deductible and coinsurances.
Our patient thinks we just sent them a very large bill?
Many patients mistake an EOB or explanation of benefits for a statement. An EOB is the carrier’s communication to the patient. Instruct your patient to call your office, or facility, and ask you what their responsibility is. Many Physicians may choose not to balance-bill their patients. It’s best for your patient to confirm their balance before making any payments.