The prospect of joining health insurance or managed care networks is increasingly attractive to behavioral healthcare providers. In part, that’s because the economics of being out-of-network versus in-network have been turned on their head. In an effort to better control their own costs and profits, payers have been cutting their out of network reimbursements, so that in many cases it makes more sense to go in network.
“With the past few years, insurers have reduced what they pay to out of network providers, almost to the point where it is equivalent or less to be out of network compared to in network,” says Anelia Shaheed, an attorney with the Law Offices of Julie W. Allison, who specializes in managed care and insurance reimbursement. “That has led to a dramatic increase of providers who want to go in network.”
All treatment centers need to weigh the pros and cons of their network status, but experts agree the final decision comes down to the ultimate financial impact.
“[Payers] cut down drastically their reimbursement levels for out of network providers,” says Nathaniel Weiner, an attorney with the Polsinelli law firm in San Francisco. “They also began to audit providers to see if the practices they were using were consistent with what payers view as medically necessary.”
Joining a network can translate to a reduced financial burden on patients, while providing a more reliable revenue stream to providers and potentially result in new referrals. However, for providers new to the process, contract negotiations can be challenging. If not handled correctly, they could even result in the provider reducing their own reimbursements.
Most payers are also narrowing their provider networks to focus on the most efficient providers and cut away the more costly ones. That means it can be more difficult initially for a provider to join those networks. Gaining access and then having enough leverage during the contract negotiation to ensure an acceptable reimbursement rate will require treatment centers to differentiate themselves in the market, back-up their claims with data on outcomes, and avoid common contracting pitfalls.
“You can’t be another face in the crowd,” Weiner says. “Research what their networks look like and if possible create something new that might fit the network need at that time. Some providers won’t have that flexibility if they are already licensed and staffed in a particular way. But the payer’s language now is data. Show us what your data is for outcomes, how you can improve the cost curve and provide better care.”
Once the provider obtains network access, the contract negotiation process can take anywhere from three to six months as providers and payers haggle over reimbursement rates and other contract terms. In the current environment, negotiating leverage comes almost entirely from providers offering unique and provably effective services that can help reduce overall costs.
Is it worth it?
Negotiating a contract with a payer can be time-consuming and frustrating. So why do it at all?
The primary benefit is that providers can stabilize their reimbursements, while also being listed in the payer’s online provider directory. That listing can help bring in new patients and revenue.
However, those listings need to be accurate. Insurer directories often include out of date information, including indications of whether or not the practice is accepting new patients, services provided, and in-network status. This is despite federal rules that would levy penalties and removal from marketplace portals if directories are not up-to-date.
New business from the directory also isn’t guaranteed. Some providers also think that insurance companies themselves will direct referrals to the practice, but that is not the case. Depending on state insurance law, the payers may actually be prohibited from recommending specific providers.
Another potential benefit is reducing administrative complexity. Going in-network can help streamline claims disputes. Providers may also have access to the payer’s medial director to resolve some questions.
“Unfortunately, in many cases the same patient who goes to an in network provider may get an authorization much more easily than with an out of network provider, even with the same criteria,” Shaheed says. “You can save time and money on authorizations.”
The New Haven, Conn.-based Turnbridge treatment center joined the Anthem network roughly one year ago. While CEO and founder David Vieau says that he hasn’t noticed Anthem’s approvals being measurably faster, reimbursements have been accelerated. “Once you are in network, those claims go to a different department and to a team of individuals you are working with on a regular basis,” Vieau says. “The processing is easier, even if the number of denials doesn’t really change.”
Ultimately, in-network status can also be a true help to clients.
“We have a responsibility to the consumer,” Vieau says. “If cost is a barrier to entry, then the provider has to think about that. As out of network deductibles have increased, the average American can’t afford them. Being in network stabilizes that to a certain degree. The consumer is spending less money on the front end to satisfy insurance requirements, and that makes more money available to provide help later in the process.”
While there are benefits to being in-network, the value of those benefits will vary by payers. Providers should carefully select potential networks based on availability (can they join the network at all?) as well as their current patient and payer mix. How much business the provider already does with an insurer (or how much business they may be turning away because they are out-of-network) can guide that selection process.
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