As a consultant and credentialing expert, the most common question I get from clients is “Should I be in or out of network in order to maximize my reimbursement?” Unfortunately, there is no easy answer to this question. There are so many details involved in the complexity of this decision and ultimately, an analysis must be completed to determine the best answer.
Below are some of the considerations a consultant would generally cover with you when helping you decide to either stay in network or go out of network:
If you are currently in network, choosing to go out of network requires a few things. In most cases, you must give the payor at least a 30-day written notice. This will allow them to inform all patients who have seen you in the last two years that they need to find a new physician or pay out of network rates. You will also need to inform your patients, in writing, of the change to your policy.
Currently, if you are in network with the payor and want to go out of network you have to consider that most patients will not see an out of network provider and will choose to go elsewhere for their care. Do you have a plan in place to speak to your patients about staying with you? Do you know how to explain the increased costs they should expect? Do you have a plan in place to recruit new patients who are okay with paying out of network rates?
3. Balance Billing
One of the key advantages to going out of network is the ability to balance bill your patients. For instance, when you were in network and submitted a bill to Cigna for $300, the EOB that came back would say the allowed amount was $105.00 and the patient responsibility is $25.00 for their copay. So Cigna would pay you $80.00 and you would collect the $25 copay from the patient. The remaining balance of $195 is your contractual obligation and you MUST, per your contract, write this amount off. Now, if you were billing out of network you would contractually be allowed to “balance bill” meaning you would bill the additional $195 to your patient. Knowing and understanding how balance billing works is a key component to deciding if you will be in or out of network.
4. Contractual Considerations
Currently, if you are in network and choose to go out of network, you may have a very hard time getting back into the payor network when you decide you again want to negotiate a new contract and be in network. Often, a physician will threaten to leave the network if the payor will not renegotiate a new contract with them. This is often a tactic that can work well, but only if you truly know how to negotiate a contract and exactly what they are looking for. This is most often best left to a professional credentialing company. If you are deciding to leave a network simply because you are unhappy with your reimbursement, consider hiring a credentialing company who has solid experience and success in negotiating new insurance contracts.
Understanding the considerations above can help you make a more informed decision, or at least have a better understanding of what implications this decision will have, regarding the future of your healthcare business. For help in making an in network or out of network decision, you should always contact an experienced credentialing company who can help you evaluate the pros and cons of this major decision.
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Cynthia Young, the former CEO of STAT, is a national billing, credentialing and practice management consultant. STAT is a U.S.-based, national provider of credentialing, payor enrollment, rate negotiation, and other credentialing related services.