Your Non-Network Out of Pocket Maximum Does not Mean Much and what YOU can do about it

Everyone knows that there is In-Network coverage, and Non-Network coverage.  In most cases, people choose to stay In-Network for their medical visits and surgeries.  Most consumers choose to stay In-Network since deductibles, coinsurance, and Out-of-Pocket (OOP) Maximums are much lower.

Non-Network coverage is provided for within most PPO contracts and HSAs.  This is generally at a much higher Deductible, Coinsurance Amount, and OOP Max.   It is common for group medical contracts to have Non-Network OOP Maxs of $8,000 – $10,000 per member per year.   Individual and ACA Plans can have Non-Network OOP Max as high as $100,000 or even unlimited.  See my recent post on this here:

However, no matter what the listed Non-Network OOP Max is, the liability to the consumer can be virtually limitless.

Here is why.

When a consumer goes to an Non-Network Provider, they are not protected by a contractual relationship between the provider and an insurance company that prohibits the provider from balance billing the consumer.  That means that the provider can bill the consumer any amount above and beyond the amount that is collected from an insurance company, that is consistent with the provider’s charge-master.

As a result, the consumer could become saddled with hundreds of thousands of dollars of balance bills.

Here is a real life example (procedure changed for illustration).

A client of mine chose to have rare eye surgery from a Non-Network hospital and doctor.  His Non-Network Coinsurance amount was 40%, his deductible was 5,000 and OOP Max was $10,000. The charges for the treatment totaled $300,000. The insurance company deemed only $200,000 of the charges as within Usual, Customary, and Reasonable charges (UCR).  The remaining $100,000 was denied as above UCR.

Immediately, the client became subject to the $5000 deductible.  Next, the $10,000 OOP Max protected against the 40% Coinsurnace amount which would have been $80,000 (40% of the $200,000.)   At this point, the client was liable for $10,000 while the insurance company paid $190,000.    In total, the provider and hospital would receive $200,000 in payments from the insurance company and the client.

You would think they would call $200k “good enough” right?   Wrong!

The provider group balance-billed the client the additional $100,000 in order to recover their entire $300,000 charge.  What makes this worse, is that the provider have every right to do so. As long as they are charging their normal charges, they have a right to bill patients for their services.

This is when we, as Brokers, were called in to see if we could remedy the situation for our client.   And after countless phone calls, emails, and begging and pleading, we were finally able to eliminate the additional charges for our client.  It was not a pretty process, but we got the job done.

Moral of the story.  Stay In-Network if humanly possible.

However, if you must go Non-Network, here are some tips. 

Tips if you have to go to a Non-Network Provider?

First, make sure you have evaluated all In-Network options.  Ask yourself, are you sure you really need to go Non-Network?

If you still believe that Non-Network is required, follow the following steps.  

  • Identify the procedure codes and ask the Non-Network providers to give a detailed list of what will be billed and the expected costs.
  • Call the 800# on your insurance card and ask for a customer service specialist, who can tell you what will be allowable under UCR for the charges incurred above.
  • Ask your insurance company how much will be allowable under your Non-Network benefits.
  • Ask for a written agreement from the Non-Network provider that they will take the Insurance company payment amount as Payment in Full, and gain their specific agreement that they will not balance bill you.
  • Then, and only then, go forward for Non-Network services.  



3 thoughts on “Your Non-Network Out of Pocket Maximum Does not Mean Much and what YOU can do about it

  1. Good step by step to avoid financial ruin

  2. What do you do when your provider refers you to a non-network provider? Most doctors offices dont have enough time to keep track of which insurance company has contracted for which doctors and some products may be in and some may be out of network. For example you could call an office and ask if they take Anthem, they might say yes, but you could still be out of network for the specific product that you carry. For fun, just call up your insurance company and ask them how much they will pay the hospital or doctor for the procedure you are going to have so that you can know your portion. THEY CANT OR WONT DO IT!

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