Why It’s Time to Go In-Network

Over the last few years, trends in healthcare payment have led many facilities and providers to move “in-network” with payors to ensure they receive better reimbursement for care. While in-network payments may be lower, they are at least predictable.

In addition, payment rates for out-of-network care have continually dropped, leading more facilities to charge patients with the balance of their bill that’s not covered by insurance.

Charging patients for the balance can be a surprise for patients—and even cause financial hardship. In California, “surprise billing” legislation have put a stop to this practice to protect patients, making it more important than ever to become an in-network provider.

Effects of the Surprise Medical Bills Law

Under this law, when patients are taken to out-of-network facilities, they still get billed the in-network rate. They will have no bills higher than that rate. Providers, on the other hand, can choose either to receive their average contracted rate or 125 percent of the Medicare reimbursement rate for these patients.

These payment rates are often not as high as reimbursement used to be for out-of-network care. This could have a large effect on mental health providers who have been more likely to be out-of-network in the past. Lower reimbursement rates for out-of-network patients can add up quickly, putting financial strain on your facility and providers. Moving in-network may lower reimbursement from your current out-of-network rates, but increase your reimbursement overall if you receive many out-of-network patients. Moving in-network can also make your reimbursement more predictable and reliable.

An America’s Health Insurance Plans (AHIP) study shows that many providers may find that moving in-network is simpler and does increase reimbursement overall. Though payors feared that providers would leave networks as a result of this law, the AHIP study showed the opposite to be true. Since the law took effect in July 2017, there are 16 percent more in-network physicians in California. This is especially true in specialties where patients are more likely to receive surprise bills, such as emergency medicine, radiology, pathology, or general surgery.

But it’s unclear still if the law is helping reduce surprise bills for patients. According to a June 2019 Peterson-Kaiser Health System Tracker report, 26 percent of Californians with employer-sponsored insurance still had at least one out-of-network charge for emergency visits in 2017 while 18 percent of inpatients saw at least one out-of-network charge. More time and study is needed to ensure the bill is working appropriately to protect patients while maintaining provider reimbursement.

The California bill could help steer federal lawmakers as they work to reduce healthcare costs for patients. If it truly does not affect network size while reducing surprise billing, it may serve as a national reimbursement model within the next few years.

At Datapro billing, we can help you navigate in-network contracts as well as the ever-changing reimbursement trends. Contact us to discuss if moving in-network will benefit your facility and learn how we can help you negotiate better in-network contracts