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Out-of-network care remains a relatively small compared to the overall cost of healthcare in the United States at approximately $40B. When factoring in property and casualty insurance claims where a fee schedule does not exist or where commercial insurance carriers are not obligated to reimburse for those services, the value may go higher. Even still payers, states, and the federal government are continually looking at the raising costs in healthcare when compared to other countries as a proportion of their gross domestic product. As questions mount about the future of Medicare and its ability to cover healthcare costs well into the future, expanding Medicaid without harming the taxpayers, and keeping insurance affordable to patients, all eyes focus on the payers and the providers.

With regulations requiring insurers to maintain network adequacy and meeting the medical loss ratio requirements, many insurers are utilizing their limited premium increases to cover administrative costs, profits, and reward in-network providers. Out-of-network providers and patients seeking care from out-of-network providers don’t see those benefits. Payers may shift greater responsibility to the member’s cost-share for out-of-pocket expense and may also limit the provider reimbursement. Such a financial strategy may be seen as a penalty to some but it is often seen as a way to motivate providers to join the insurer’s network and have the patients obtain care through an in-network provider to have lower out-of-pocket costs. This has forced some payers to pay out-of-network providers lower than what they would pay their contracted, in-network providers.

In doing so, the providers are doing more with collections practices today to obtain their reimbursement from patients. However, part of this is also due to regulatory aspects. Regulators continue to allow the maximum out-of-pocket expense for a patient to increase due to high deductible plans. This allows regulators to force premiums to remain low, shift costs to patient responsibility, and make providers become collection companies in addition to healthcare service providers.

Insurance carriers realize this and see how their insurance contracts may be causing some providers to obtain a greater portion of those limited premium increases, making reimbursement increases for other in-network providers more challenging. As a result, payment rules, coverage determinations, benefit plan limitations, and out-of-network reimbursement strategies take shape to manage those limited dollars from premium increases.

Payers are now looking at artificial intelligence in the out-of-network space as well as transparency in coverage data, independent studies, and appeals and grievances data to create new reimbursement strategies for providers.

Payers are trying to maintain a balance of network adequacy, patient/insured satisfaction, and medical loss ratio requirements, and low appeals to determine the correct reimbursement. As insurance carriers implement artificial intelligence that looks at this data some providers may receive more and others may receive less reimbursement for their out-of-network services.