{"id":5347,"date":"2024-07-02T10:10:43","date_gmt":"2024-07-02T14:10:43","guid":{"rendered":"https:\/\/communicator.pef.org\/?p=5347"},"modified":"2024-07-02T10:14:31","modified_gmt":"2024-07-02T14:14:31","slug":"out-of-network-new-reimbursement-method","status":"publish","type":"post","link":"https:\/\/communicator.pef.org\/issue\/volume-42-no-6\/out-of-network-new-reimbursement-method\/","title":{"rendered":"Health Notes: Out-of-network new reimbursement method"},"content":{"rendered":"

\"Out-of-networkAugust 5, 2024 —<\/em> As of Jan. 1, 2024, there was a change in how out-of-network (OON) providers are going to be reimbursed by the Empire Plan. Previously, OON providers were paid based on \u201creasonable and customary charges;\u201d that is, the provider\u2019s actual charge, usual charge, or the usual charges of other providers in the area. <\/span>\u00a0<\/span><\/p>\n

OON providers will now instead be paid based on 275% of the Medicare rate. This change is intended to help contain Empire Plan costs, which is important not only to the state but to PEF members who pay a share of the annual premium through their bi-weekly payroll deductions.\u00a0<\/span>\u00a0<\/span><\/p>\n

Previously, membership was notified of this change throughout contract negotiations and the ratification process. This change was outlined on the highlights sheet for the new contract as well as spoken about at membership meetings before and after ratification of the new contract. This is a challenging topic that we wish to continue to educate our membership on.<\/span>\u00a0<\/span><\/p>\n

The OON reimbursement change was driven in large part by\u202f<\/span>the 2020 report, <\/span>An Analysis of Reasonable and Customary Out-of-Network Reimbursement Rates<\/span><\/i>, from the Office of the State Comptroller<\/span><\/a>, <\/span>which found that <\/span>OON costs are often significantly higher than in-network costs for the same exact services.\u00a0<\/span>\u00a0<\/span><\/p>\n

For example, the report noted that the average reimbursement for a routine office visit in 2016 was $29 for in-network care and $147 for OON. The report also noted discrepancies among OON providers across the state, as well as in neighboring areas. For example, a specific spinal procedure in Suffolk County was $38,000, while the same procedure in the Niagara Falls region was just $167. And among neighboring areas, the report found that another spinal procedure was $90,000 in the Far Rockaway\/Hempstead region, double the rate for the same procedure in both neighboring regions of Port Washington\/Great Neck ($43,755) and Flushing\/Jamaica ($45,000).\u00a0<\/span>\u00a0<\/span><\/p>\n

The report also noted the potential for providers in a particular region, knowing that their reimbursement rates are based on area billings, to bill higher than necessary to drive up the reimbursement rates in that region. Those high OON reimbursements contribute to increased premiums which are paid in part by PEF enrollees.\u202f<\/span>\u00a0<\/span><\/p>\n

Enrollees who continue to use OON providers may see an increase in out-of-pocket expenses. These increases will depend on how the OON providers balance bill for their services. However, there is a safety net for enrollees who do not have access to certain in-network providers through the medical access program which provides paid-in-full benefits \u2013 minus appropriate co-pays \u2013 when there are no participating providers available within access standards. (See <\/span>Appendix VII<\/span><\/i> of the Tentative Agreement<\/span><\/a> for information about access standards.)\u00a0<\/span>\u00a0<\/span><\/p>\n

It is anticipated that the change in the OON reimbursement rate to 275% of the Medicare rate may drive some OON providers to join the Empire network, since they will no longer be reimbursed based on the prior usual and customary model.\u202f<\/span>\u00a0<\/span><\/p>\n

This will only effect members utilizing OON providers. This is to steer members and providers to stay in network to keep plan costs down. If you <\/span>choose<\/span><\/i> to use an OON provider, it is advised to call ahead to Empire (1-877-769-7447), to review your out-of-pocket expenses that may occur.\u00a0<\/span>\u00a0<\/span><\/p>\n

If you use an <\/span>in-network provider this will have no effect to you. This is only a change in how providers are reimbursed and does not affect\/change the Empire plan\u2019s network. <\/span><\/b>This is not a change in benefits, this is a change in the reimbursement method between carriers and providers.<\/span>\u00a0<\/span><\/p>\n

Federal and state protections against surprise medical bills limit a covered individual\u2019s liability when they are unknowingly treated by OON providers and later billed at the OON rate. This results in what they label \u201cSurprise Medical Bills,\u201d for which the patient is responsible, that greatly exceed what they would expect to pay under the insurance policy (for a network provider).\u00a0<\/span>\u00a0<\/span><\/p>\n

The other side of this is how OON providers will be reimbursed for their services \u2013 275% of Medicare. They want to be paid by someone, and the law prohibits them from collecting from unwitting patients. Both the state and federal laws require the insurer to make up the difference, but they each set the amount the insurers are required to reimburse using different formulas.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u00a0<\/span>The potential impact of this treatment on PEF members is mostly related to the costs to the Empire Plan. If OON providers are reimbursed by the Empire Plan at a higher rate, our experience will result in higher costs and rates in the future. That means members respective share of premiums will increase. This is the natural and unavoidable consequence of rates for OON going up.<\/span>\u00a0<\/span><\/p>\n

If you believe you have received an unexpected bill, from an out-of-network provider, stay tuned for next month\u2019s <\/span>Communicator<\/span><\/i> article, detailing information that could protect you from having to pay back a surprise bill.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

August 5, 2024 — As of Jan. 1, 2024, there was a change in how out-of-network (OON) providers are going to be reimbursed by the Empire Plan. Previously, OON providers…<\/p>\n","protected":false},"author":13,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"division":[],"allowed_regions":[],"allowed_divisions":[],"class_list":["post-5347","post","type-post","status-publish","format-standard","hentry","category-uncategorized","issue-volume-42-no-6"],"acf":[],"yoast_head":"\nHealth Notes: Out-of-network new reimbursement method - PEF Communicator<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/communicator.pef.org\/issue\/volume-42-no-6\/out-of-network-new-reimbursement-method\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Health Notes: Out-of-network new reimbursement method\" \/>\n<meta property=\"og:description\" content=\"August 5, 2024 — As of Jan. 1, 2024, there was a change in how out-of-network (OON) providers are going to be reimbursed by the Empire Plan. 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