WHEN YOU’RE LOOKING for the best possible medical care, you may consider using a doctor who isn’t in your insurance company’s network.
That means care will cost more. In some cases, a lot more.
Before you go out-of-network, make sure you understand how payments work, what your insurance company will cover and what it won’t.
For starters, insurance payments to providers are based on what’s “usual, customary and reasonable,” or UCR.
This is the maximum amount an insurer will consider eligible for reimbursement and it only applies when you’re using an out-of-network provider, says Ed Gaelick, a chartered life underwriter and chartered financial consultant with PSI Consultants in Glen Rock.
UCR is typically based on a survey of charges for a particular health service within a specific geographical area, he says. Commonly, UCR is set at a certain percentage of all charges made by providers of similar services. In New Jersey, the most common reimbursement level is at the 80th percentile, Gaelick says.
So, let’s say 100 doctors in a given ZIP code are surveyed about charges for a specific procedure and results show that the fees range from $100 to $250. If the 80th highest-priced doctor charges $200, that fee would be the UCR level at the 80th percentile.
Because it is the insured person’s choice to use non-network providers, he or she could be responsible for any amounts over UCR, Gaelick says. “For non-network claims, UCR is considered first, then deductible, and then coinsurance is applied,” he says.
He offers this example:
The insured is enrolled in a plan that pays 100 percent in-network and 70 percent out-of-network. (Assume no deductibles apply.) The insured uses out-of-network services, with total charges of $4,000. The insurance company determines that the maximum allowable UCR charge for the surgery is $3,000 (80 percent of providers in the member’s geographical area charge $3,000 or less for this type of surgery). The insurance carrier will reimburse the member 70 percent of $3,000, or $2,100. The member will pay 30 percent of $3,000, or $900, plus the $1,000 difference between the total bill and the $3,000 UCR.
“This additional $1,000 cost to the member is called ‘balance billing’ and does not apply to any maximum out-of-pocket limits,” Gaelick says. “The member is responsible for paying $1,900 of the $4,000 billed charge.”
Before you choose any out-of-network provider, you should ask if it will accept UCR as applied by your insurance carrier. If not, you’ll have a few options: Pay the balance above UCR; ask the provider to forgive the balance; appeal to your insurance company; or negotiate with the provider to reduce the balance.
You could also ask if the provider will accept small monthly payments. “If they can get paid over time, it is better than not getting paid at all,” says Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton.
The key is to know your options before you receive the service because it’s always harder to negotiate afterward.
Also know that even if your doctor or hospital is in-network, it’s possible that ancillary services may not be.
Gaelick says it’s important to have a detailed conversation with your doctor.
“Find out who the anesthesiologist will be ahead of time to verify their network status. If they are non-participating, find out if you have a choice,” Gaelick says. “If not, you or your doctor should reach out to the insurance carrier to request an in-network exception to avoid the higher costs.”
Other common out-of-network charges include assistant physicians, assistant surgeons and durable medical equipment sent home with you, such as crutches, a brace, or a monitor, Gaelick says.
“Ask if the assistants and/or durable medical equipment provider participates in your network. If not, negotiate,” he says.
There may be times when out-of-network bills catch you by surprise, such as an emergency procedure. “In an emergency, where you don’t have the luxury to negotiate before, it will be a scramble afterward,” Gaelick says. “While it’s not a slam dunk (that) you’ll be slammed, odds are you may.”
Karin Price Mueller, the founder of NJMoneyHelp.com, writes the Bamboozled consumer affairs column for The Star-Ledger, and the Money and Biz Brain columns for Inside Jersey. Send your money questions to her at Bamboozled@njadvancemedia.com.