March 8, 2010

Although we have discussed out-of-network billing issues in past Alerts, today’s issue highlights other out-of-network challenges facing physicians and facilities. For those anesthesia groups that have strategically remained out-of-network providers, we anticipate continued challenges as insurance companies explore new strategies for reducing costs associated with paying for out-of-network services rendered to patients.

In the February 15, 2010 Alert, ABC Director of Compliance and Client Services, Hal Nelson provided suggestions for aggressively pursuing and appealing less than full charge payments. Today we want to apprise you of recent trends we are seeing with insurance companies targeting out-of-network providers so that you may be prepared and consider these issues with regard to your strategic planning on participation status.

Specifically, some anesthesia and pain groups may be aware that certain insurance companies have been putting increased pressure on participating physicians who may refer patients to providers or facilities that are non-participating. In fact, in some states including in the Midwest region, insurance companies have issued letters to physicians who refer to non-participating facilities and providers essentially threatening them that termination could result for failure to follow the plan’s policies and forms with regard to referrals to non-participating providers. In one example, a plan recently implemented a policy stating that although many patients have out-of-network benefits and are free to exercise the benefits, the plan was allegedly concerned that patients were not actually making a conscious choice to exercise those benefits. Accordingly, the plan has instituted a rigorous advanced notice policy which requires the referring physician to obtain the patient’s signature on a specific form prior to scheduling services. In this form, the patient must acknowledge that he or she understands that the physician is non-participating; that the patient can contact the plan to obtain names of other providers who are participating; and that absent special circumstances the non-participating provider cannot waive co-pays and deductibles.

Some insurance companies have instituted these types of policies for certain services including anesthesia performed at facilities owned in whole or in part by the referring physicians. It has also been reported in the media that one insurance company in New Jersey terminated 17 physicians who were associated with a non-participating facility for referring cases to the facility. Insurance companies also use other tactics such as capping out-of-network benefits and instituting out-of network fee schedules tying reimbursement to a percentage of Medicare rates.

Non-participating physicians and facilities frustrated by these tactics often contemplate what can be done. The practical reality is that although there may be legal theories available to challenge some of the emerging trends and tactics, many individual physician groups do not have the resources to tackle an insurance company in a litigation battle. In some instances, providers have united to institute class action suits against insurance companies alleging various legal theories. Some physician associations have been active in bringing about state Attorney General investigations into such insurance company practices. Anesthesiologists affected by these policies may want to consider contacting local, state and national professional associations to explore lobbying efforts, pooled resources, and judicial intervention options.

As always, we hope that this information is useful to you.

With best wishes,

Tony Mira
President and CEO

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