Confused about health insurance coverage for out-of-network services

October 12, 2016 7:42 PM

Background info: I have an employer-based PPO plan with BCBS. According to the plan, out-of-network providers and services are covered at 80 percent (I owe remaining 20 percent). Deductible: $250 per year, out of pocket maximum: $2k per year which includes deductible and out of network as well. I am undergoing cancer treatment and one of the surgical specialists I want is out of my network. I'm trying to determine if I can afford to see him. See details below!

Although it sounds straightforward, when I spoke to an insurance rep today, he confused me by saying that "balanced billing" means that the ins company decides what a service costs, not the provider, and I may be responsible for additional fees, even beyond my OOP max. Does this make sense? How can I figure out what I will realistically owe before the procedure so that I can see if it is in my budget or not? The surgeon sent me his quotes with "CPT coding" on it but the insurance rep didn't seem to understand this and his numbers didn't make sense. Should I have the provider contact BCBS directly, or what are my options here?

posted by CancerSucks to Work & Money (11 answers total)

Your insurance probably covers not 80% of out-of-network charges, but 80% of "reasonable and customary" out-of-network charges. "Reasonable and customary" is often a euphemism for "very, very small."

You should also be aware that if you are using out-of-network doctors or an out-of-network hospital for a surgery, other personnel may become involved during the process (that is, while you are not conscious) who may also be out-of-network, and you'll be expected to pay accordingly.
posted by praemunire at 8:06 PM on October 12, 2016 [3 favorites]

If you have health insurance and your provider is in-network, the provider sort of gives you (and the insurance company) a discount: maybe the regular, no-insurance, full-price cost of a procedure is $300 at that office but a particular insurance company has decided they only think it should cost $100. As a condition of participating/being in-network, the provider has agreed to accept only $100 in total for that procedure including what your insurance pays and what you pay. $100 is then the negotiated rate.

If you go to someone out of network, that provider will not give you/your insurance company that discount. They bill for $300 (or whatever they have decided to charge for that procedure), but your insurance company will only reimburse you for 80% of the $100 they think the procedure should cost, not 80% of the $300 that was actually billed. The provider will bill you for not just $20 but for the whole $220 balance that was not paid for by your insurance company. This is "balance billing."

You need to figure out what the insurance company's negotiated rates for your procedures are, since they will reimburse you for 80% of that rather than 80% of the surgeon's actual fees.
posted by needs more cowbell at 8:07 PM on October 12, 2016 [6 favorites]

(P.S. Just for help in Googling, it's "balance billing," without the d.)
posted by praemunire at 8:07 PM on October 12, 2016

"Negotiated rate", "usual and customary charge", "allowed amount", "approved charge" and the like are different terms for the same thing, AFAIK--basically, what the insurance company thinks the procedure should cost.
posted by needs more cowbell at 8:12 PM on October 12, 2016

I think it's worthwhile to call your insurance company back and speak to another rep. You probably just talked to a rep who wasn't very knowledgeable. If you need to, escalate to a supervisor. Your insurance company really should be able to provide you with the rates they will pay for the procedures, so you know how much you'll be on the hook for above what they will pay.

Also, I know you didn't specifically ask this, but at least some medical practices are willing to negotiate their rates. The time to do this is now, before the procedure is done. Once you know how much your insurance company is willing to pay, if it's less than what the doctor is charging, you can call the doctor's office to see if they will lower their rates. They might be willing to accept what the insurance company will pay them, or maybe give you a partial reduction. Even if they're not willing to lower their prices, they will NOT refuse to treat you because you tried to negotiate a lower price. I would discuss this with whoever is responsible for doing billing in the doctor's office (if there is such a person), and not directly with the doctor.
posted by cruelfood at 8:27 PM on October 12, 2016

Response by poster: Thanks everyone!

So what does the Insurance company base the "usual & customary" on? The surgery I need ranges from about 10-20k depending on location. I should expect them to cover the low end of this it sounds like?

And the $2k maximum doesn't include the remainder I would pay after insurance or does it?
posted by CancerSucks at 9:34 PM on October 12, 2016

You should also confirm that balance billing is a thing in your state. It's not legal everywhere and the rep you spoke to doesn't inspire a lot of confidence that he would give you the right info on that.
posted by bleep at 9:44 PM on October 12, 2016

You will have to read your policy carefully to see what is excluded from the out-of-pocket maximums. My instinct is that balance billing often is, but the only way you can tell for your own case is to look at the policy.
posted by praemunire at 11:11 PM on October 12, 2016

The "usual and customary" is based on some internal formula the insurance company uses to determine what they'd like to pay. To get an idea for what your out-of-pocket is, you need to subtract the BCBS usual and customary fee from the surgeon's fee. That's what you owe the surgeon, after applying any deductible or co-insurance (which is some other nonsense that BCBS uses to have you pay more of the bill). Then you have to do the same thing for each aspect of the procedure -- the (out-of-network?) hospital, the anesthesiologist, the medicines/supplies/stuff used in the procedure. I did this once and my surgeon was in network, but the hospital wasn't and I got an unexpected $10,000 bill. The surgeon reduced the hospital bill because he was a partial owner of the facility and he always eats the out-of-network difference, but no one told me that before I got the bill. This stuff is super counter-intuitive. The surgeon's office should help you, but you have to check your policy and ask questions of both BCBS and the surgeon's billing staff to make a realistic estimate.
posted by *s at 6:46 AM on October 13, 2016

The insurance company will tell you what the UCR is for a specific billing code so you can get a get idea of the cost there. The issue is making sure you have ALL the billing codes for your procedure and ALL the people who will be involved. So you can get close, but not all the way there.

Like many have said above a lot more people will be involved and bill for their time, the anesthesiologist, the surgical nurses, the recovery nurses, the assistant surgeon and the problem is that you won't know who these people are before your procedure so you won't know if they are in or out of network for you until you get billed. It is a giant hole and a giant f-you from most hospitals and insurance companies. It doesn't matter that you had no say in who your nurse was.

I say this as a person whose job it is to manage health insurance programs, in my eyes this is the single biggest failing of our current insurance set-up and I wish to God that it is one of the things fixed when we start editing the affordable care act.
posted by magnetsphere at 8:40 AM on October 13, 2016

Your out-of-pocket max (and deductible) is probably different for in-network and out-of-network.
posted by radioamy at 10:46 AM on October 13, 2016