Out of Network overview for Surgical Assistants

IN NETWORK AND OUT OF IN NETWORK AND OUT OF NETWORK BILLINGNETWORK BILLING

IN NETWORK AND OUT OF IN NETWORK AND OUT OF NETWORK BILLINGNETWORK BILLING

Luis F. Aragon, RSASurgbill

Illinois Surgical Assistant Association

Association of Surgical Assistants

What does being “out of network” What does being “out of network” mean ?mean ?What does being “out of network” What does being “out of network” mean ?mean ?

• Very simply, it refers to Very simply, it refers to a provider that does a provider that does not have a contract not have a contract with an with an insurance carrier.insurance carrier.

• Very simply, it refers to Very simply, it refers to a provider that does a provider that does not have a contract not have a contract with an with an insurance carrier.insurance carrier.


Business Risks:Business Risks:

In the majority of instances, quick In the majority of instances, quick payment is not the case with out-of-payment is not the case with out-of-network claims, despite the fact that network claims, despite the fact that most states require claims to be most states require claims to be processed and paid in a timely manner. processed and paid in a timely manner. Statistically, about a third of cases are Statistically, about a third of cases are paid within 60 days. However, in the paid within 60 days. However, in the balance of those cases, payment is balance of those cases, payment is delayed, sometimes significantly because delayed, sometimes significantly because of additional questions and further of additional questions and further information requested by the insurance information requested by the insurance carriers.carriers.

Business Risks:Business Risks:

In the majority of instances, quick In the majority of instances, quick payment is not the case with out-of-payment is not the case with out-of-network claims, despite the fact that network claims, despite the fact that most states require claims to be most states require claims to be processed and paid in a timely manner. processed and paid in a timely manner. Statistically, about a third of cases are Statistically, about a third of cases are paid within 60 days. However, in the paid within 60 days. However, in the balance of those cases, payment is balance of those cases, payment is delayed, sometimes significantly because delayed, sometimes significantly because of additional questions and further of additional questions and further information requested by the insurance information requested by the insurance carriers.carriers.

RISKS OF BEING OUT OF NETWORKRISKS OF BEING OUT OF NETWORKRISKS OF BEING OUT OF NETWORKRISKS OF BEING OUT OF NETWORK


Life Cycle of an Insurance ClaimLife Cycle of an Insurance ClaimLife Cycle of an Insurance ClaimLife Cycle of an Insurance Claim


• Business Risks:Business Risks:Another huge problem involves various Another huge problem involves various attempts by insurance carriers to avoid attempts by insurance carriers to avoid paying at UCR charges. A typical paying at UCR charges. A typical example is the artificial fee schedules example is the artificial fee schedules applied by some carriers in certain applied by some carriers in certain states. The insurer agrees to pay a states. The insurer agrees to pay a certain percentage of billed charges certain percentage of billed charges calculated commonly by its calculated commonly by its determination of UCR charges, determination of UCR charges, reserving the right to reimburse the reserving the right to reimburse the lower amount of the two. But who lower amount of the two. But who determines this charge?determines this charge?

• Business Risks:Business Risks:Another huge problem involves various Another huge problem involves various attempts by insurance carriers to avoid attempts by insurance carriers to avoid paying at UCR charges. A typical paying at UCR charges. A typical example is the artificial fee schedules example is the artificial fee schedules applied by some carriers in certain applied by some carriers in certain states. The insurer agrees to pay a states. The insurer agrees to pay a certain percentage of billed charges certain percentage of billed charges calculated commonly by its calculated commonly by its determination of UCR charges, determination of UCR charges, reserving the right to reimburse the reserving the right to reimburse the lower amount of the two. But who lower amount of the two. But who determines this charge?determines this charge?



• Business:Business:

Being out-of-network requires continued, Being out-of-network requires continued, extensive training and education for extensive training and education for providers and their office staff, their providers and their office staff, their surgeon’s staff and patients. A great surgeon’s staff and patients. A great surgical experience can be damaged surgical experience can be damaged when several weeks after a procedure when several weeks after a procedure the patient receives what they might the patient receives what they might think is an enormous bill, but it could think is an enormous bill, but it could simply be the Explanation of Benefi ts simply be the Explanation of Benefi ts (EOB). Patients must be educated so (EOB). Patients must be educated so that they understand what the EOB is that they understand what the EOB is and the process and responsibilities and the process and responsibilities associated with payment.associated with payment.

• Business:Business:

Being out-of-network requires continued, Being out-of-network requires continued, extensive training and education for extensive training and education for providers and their office staff, their providers and their office staff, their surgeon’s staff and patients. A great surgeon’s staff and patients. A great surgical experience can be damaged surgical experience can be damaged when several weeks after a procedure when several weeks after a procedure the patient receives what they might the patient receives what they might think is an enormous bill, but it could think is an enormous bill, but it could simply be the Explanation of Benefi ts simply be the Explanation of Benefi ts (EOB). Patients must be educated so (EOB). Patients must be educated so that they understand what the EOB is that they understand what the EOB is and the process and responsibilities and the process and responsibilities associated with payment.associated with payment.



Legal and RegulatoryState based (out of network legislation)Waiver of co-insurance and deductibles

Legal and RegulatoryState based (out of network legislation)Waiver of co-insurance and deductibles



Clean claimClean claimClean claimClean claim


Patients can be billed for non-covered procedures, Patients can be billed for non-covered procedures, but not for unauthorized services. Providers can but not for unauthorized services. Providers can process denials of unauthorized services as a process denials of unauthorized services as a business loss however the IRS can challenge this business loss however the IRS can challenge this methodology.methodology.

Claims are adjudicated by line item (not for total Claims are adjudicated by line item (not for total charges), which means that payers bundle and edit charges), which means that payers bundle and edit code numbers for individual procedures and services code numbers for individual procedures and services (Unless referred to third party companies for (Unless referred to third party companies for negotiation)negotiation)

The patient is responsible for co-payments and The patient is responsible for co-payments and deductibles, but does not pay more than the allowed deductibles, but does not pay more than the allowed negotiated rate.negotiated rate.

Patients can be billed for non-covered procedures, Patients can be billed for non-covered procedures, but not for unauthorized services. Providers can but not for unauthorized services. Providers can process denials of unauthorized services as a process denials of unauthorized services as a business loss however the IRS can challenge this business loss however the IRS can challenge this methodology.methodology.

Claims are adjudicated by line item (not for total Claims are adjudicated by line item (not for total charges), which means that payers bundle and edit charges), which means that payers bundle and edit code numbers for individual procedures and services code numbers for individual procedures and services (Unless referred to third party companies for (Unless referred to third party companies for negotiation)negotiation)

The patient is responsible for co-payments and The patient is responsible for co-payments and deductibles, but does not pay more than the allowed deductibles, but does not pay more than the allowed negotiated rate.negotiated rate.

Facts to knowFacts to knowFacts to knowFacts to know


No Out of Network benefitsNo Out of Network benefitsNo Out of Network benefitsNo Out of Network benefits


Co-insuranceCo-insuranceCo-insuranceCo-insurance


No balance billing allowedNo balance billing allowedNo balance billing allowedNo balance billing allowed


DeductibleDeductibleDeductibleDeductible


Co-insuranceCo-insuranceCo-insuranceCo-insurance


To bill or not to bill! To bill or not to bill! (Patients)(Patients)To bill or not to bill! To bill or not to bill! (Patients)(Patients)

This has been an issue of debate nationwide in the This has been an issue of debate nationwide in the Surgical Assistant industry for decades now.Surgical Assistant industry for decades now.

Facilities and surgeons want the advantage of our Facilities and surgeons want the advantage of our services for free or for a minimal fee but do not want services for free or for a minimal fee but do not want their patients to be bothered with an additional bill.their patients to be bothered with an additional bill.

We strongly recommend billing for deductibles and We strongly recommend billing for deductibles and co-payments, but strongly advise against balance co-payments, but strongly advise against balance billing or when the plan does not have out of billing or when the plan does not have out of network benefits. (State based)network benefits. (State based)

And even deductibles and co-payments fall in the out And even deductibles and co-payments fall in the out of network category, you have to make sure that of network category, you have to make sure that your surgeons and facilities know that you are your surgeons and facilities know that you are engaging in this practice.engaging in this practice.

This has been an issue of debate nationwide in the This has been an issue of debate nationwide in the Surgical Assistant industry for decades now.Surgical Assistant industry for decades now.

Facilities and surgeons want the advantage of our Facilities and surgeons want the advantage of our services for free or for a minimal fee but do not want services for free or for a minimal fee but do not want their patients to be bothered with an additional bill.their patients to be bothered with an additional bill.

We strongly recommend billing for deductibles and We strongly recommend billing for deductibles and co-payments, but strongly advise against balance co-payments, but strongly advise against balance billing or when the plan does not have out of billing or when the plan does not have out of network benefits. (State based)network benefits. (State based)

And even deductibles and co-payments fall in the out And even deductibles and co-payments fall in the out of network category, you have to make sure that of network category, you have to make sure that your surgeons and facilities know that you are your surgeons and facilities know that you are engaging in this practice.engaging in this practice.


AMA Council on Ethics and Judicial AMA Council on Ethics and Judicial AffairsAffairsAMA Council on Ethics and Judicial AMA Council on Ethics and Judicial AffairsAffairs

Opinion Issued: Opinion Issued: The AMA has The AMA has acknowledged that routine acknowledged that routine waivers of waivers of coinsurance/deductibles coinsurance/deductibles constitutes fraud, and proclaims constitutes fraud, and proclaims the practice to be unethical. the practice to be unethical.

Opinion Issued: Opinion Issued: The AMA has The AMA has acknowledged that routine acknowledged that routine waivers of waivers of coinsurance/deductibles coinsurance/deductibles constitutes fraud, and proclaims constitutes fraud, and proclaims the practice to be unethical. the practice to be unethical.


•http://www.ama-assn.org/ama/pub/category/4615.html

AMA Council on Ethics and Judicial AMA Council on Ethics and Judicial

AffairsAffairs

AMA Council on Ethics and Judicial AMA Council on Ethics and Judicial

AffairsAffairs

• Opinion 6.12 - Forgiveness or Opinion 6.12 - Forgiveness or Waiver of Insurance Waiver of Insurance Copayments:Copayments:

Physicians should be aware that Physicians should be aware that forgiveness or waiver of co-forgiveness or waiver of co-payments may violate the policies of payments may violate the policies of some insurers, both public and some insurers, both public and private….. Routine forgiveness or private….. Routine forgiveness or waiver of co-payments may waiver of co-payments may constitute fraud under state and constitute fraud under state and federal law.federal law.

• Opinion 6.12 - Forgiveness or Opinion 6.12 - Forgiveness or Waiver of Insurance Waiver of Insurance Copayments:Copayments:

Physicians should be aware that Physicians should be aware that forgiveness or waiver of co-forgiveness or waiver of co-payments may violate the policies of payments may violate the policies of some insurers, both public and some insurers, both public and private….. Routine forgiveness or private….. Routine forgiveness or waiver of co-payments may waiver of co-payments may constitute fraud under state and constitute fraud under state and federal law.federal law.


HIPAA Section 242HIPAA Section 242(Public Law 104-191 104(Public Law 104-191 104thth Congress) Title II, Subtitle E Congress) Title II, Subtitle EHIPAA Section 242HIPAA Section 242(Public Law 104-191 104(Public Law 104-191 104thth Congress) Title II, Subtitle E Congress) Title II, Subtitle E

Whoever knowingly and willfully executes, or Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice-- attempts to execute, a scheme or artifice-- (1) to defraud any health care benefit (1) to defraud any health care benefit program; or (2) to obtain, by means of false program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or or fraudulent pretenses, representations, or promises, any of the money or property promises, any of the money or property owned by, or under the custody or control owned by, or under the custody or control of, any health care benefit program, in of, any health care benefit program, in connection with the delivery of or payment connection with the delivery of or payment for health care benefits, items, or services, for health care benefits, items, or services, shall be fined under this title or imprisoned shall be fined under this title or imprisoned not more than 10 years, or both. not more than 10 years, or both.

Whoever knowingly and willfully executes, or Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice-- attempts to execute, a scheme or artifice-- (1) to defraud any health care benefit (1) to defraud any health care benefit program; or (2) to obtain, by means of false program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or or fraudulent pretenses, representations, or promises, any of the money or property promises, any of the money or property owned by, or under the custody or control owned by, or under the custody or control of, any health care benefit program, in of, any health care benefit program, in connection with the delivery of or payment connection with the delivery of or payment for health care benefits, items, or services, for health care benefits, items, or services, shall be fined under this title or imprisoned shall be fined under this title or imprisoned not more than 10 years, or both. not more than 10 years, or both.


Fraudulent & False Fraudulent & False StatementsStatementsFraudulent & False Fraudulent & False StatementsStatements Professional courtesy discounts in Professional courtesy discounts in

the form of a waiver of a co-payment the form of a waiver of a co-payment or deductible constitutes both health or deductible constitutes both health care fraud and false statements.care fraud and false statements.

Knowing you are required to collect Knowing you are required to collect a co-pay or deductible but billing a co-pay or deductible but billing insurance only is committing health insurance only is committing health care fraud;care fraud;

By billing an insurance company one By billing an insurance company one charge but failing to collect the charge but failing to collect the patient co-pay or deductible, the patient co-pay or deductible, the provider is making a false statement provider is making a false statement regarding the charge.regarding the charge.

Professional courtesy discounts in Professional courtesy discounts in the form of a waiver of a co-payment the form of a waiver of a co-payment or deductible constitutes both health or deductible constitutes both health care fraud and false statements.care fraud and false statements.

Knowing you are required to collect Knowing you are required to collect a co-pay or deductible but billing a co-pay or deductible but billing insurance only is committing health insurance only is committing health care fraud;care fraud;

By billing an insurance company one By billing an insurance company one charge but failing to collect the charge but failing to collect the patient co-pay or deductible, the patient co-pay or deductible, the provider is making a false statement provider is making a false statement regarding the charge.regarding the charge.


What Does OIG Say?What Does OIG Say?What Does OIG Say?What Does OIG Say?

In 1991 the Office of Inspector General In 1991 the Office of Inspector General (OIG) issued a fraud alert concerning (OIG) issued a fraud alert concerning the wavier of co-pays and the wavier of co-pays and deductibles. The OIG stated that deductibles. The OIG stated that billing billing ““insurance onlyinsurance only”” may violate may violate the False Claims Act, the Anti-the False Claims Act, the Anti-Kickback Statute, the Civil Monetary Kickback Statute, the Civil Monetary Penalties Law, 42 U.S.C sec 1320a-Penalties Law, 42 U.S.C sec 1320a-7a(a)(5), 7a(a)(5), as amendedas amended by Pub.L.No by Pub.L.No 104-91 sec 231 (h), and State laws.104-91 sec 231 (h), and State laws.

In 1991 the Office of Inspector General In 1991 the Office of Inspector General (OIG) issued a fraud alert concerning (OIG) issued a fraud alert concerning the wavier of co-pays and the wavier of co-pays and deductibles. The OIG stated that deductibles. The OIG stated that billing billing ““insurance onlyinsurance only”” may violate may violate the False Claims Act, the Anti-the False Claims Act, the Anti-Kickback Statute, the Civil Monetary Kickback Statute, the Civil Monetary Penalties Law, 42 U.S.C sec 1320a-Penalties Law, 42 U.S.C sec 1320a-7a(a)(5), 7a(a)(5), as amendedas amended by Pub.L.No by Pub.L.No 104-91 sec 231 (h), and State laws.104-91 sec 231 (h), and State laws.



• Routine Waiver of Routine Waiver of Deductibles & Coinsurance Deductibles & Coinsurance ProhibitedProhibited

• 1994 Special Fraud Alert - 1994 Special Fraud Alert - http://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.htmlhttp://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.html

• 1991 Safe Harbor Regulations Alert – 1991 Safe Harbor Regulations Alert – • http://oig.hhs.gov/fraud/docs/safeharborregulations/072991.htm

• Routine Waiver of Routine Waiver of Deductibles & Coinsurance Deductibles & Coinsurance ProhibitedProhibited

• 1994 Special Fraud Alert - 1994 Special Fraud Alert - http://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.htmlhttp://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.html

• 1991 Safe Harbor Regulations Alert – 1991 Safe Harbor Regulations Alert – • http://oig.hhs.gov/fraud/docs/safeharborregulations/072991.htm


http://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.html

http://oig.hhs.gov/fraud/docs/safeharborregulations/072991.htm

http://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.html

http://oig.hhs.gov/fraud/docs/safeharborregulations/072991.htm


• Waivers of Cost-Sharing Amounts For Waivers of Cost-Sharing Amounts For Financially needy Medicare & Medicaid Financially needy Medicare & Medicaid Patients Permitted:Patients Permitted:

1)1) Waiver must not be routine;Waiver must not be routine;2)2) Waivers may not be offered through Waivers may not be offered through

advertisement or solicitation;advertisement or solicitation;3)3) Waivers may only be offered after Waivers may only be offered after

determining in good faith that there is a determining in good faith that there is a financial need or when reasonable financial need or when reasonable collection efforts have failed collection efforts have failed

• Waivers of Cost-Sharing Amounts For Waivers of Cost-Sharing Amounts For Financially needy Medicare & Medicaid Financially needy Medicare & Medicaid Patients Permitted:Patients Permitted:

1)1) Waiver must not be routine;Waiver must not be routine;2)2) Waivers may not be offered through Waivers may not be offered through

advertisement or solicitation;advertisement or solicitation;3)3) Waivers may only be offered after Waivers may only be offered after

determining in good faith that there is a determining in good faith that there is a financial need or when reasonable financial need or when reasonable collection efforts have failed collection efforts have failed


•See testimony, Lewis Morris, Chief Counsel to OIG, 2004 http://oig.hhs.gov/testimony/docs/2004/40624oig.pdf

Best practice tipBest practice tipBest practice tipBest practice tip

PROVIDE AN ABN (Advanced Beneficiary Notice) during PROVIDE AN ABN (Advanced Beneficiary Notice) during the first visit to your surgeonthe first visit to your surgeon’’s office:s office:

Your doctors utilize a Surgical Assistant during some surgeries that the hospital or your surgeon deem

necessary, this assistant is not provided by the hospital. The fee for the assistant is 20% of the surgical charge, he/she will bill your insurance carrier, however if your insurance does not cover this service it will be your

responsibility. In addition most insurance plans do not contract with Surgical Assistants and therefore this charge might be an out of network expense, please confirm with your insurance carrier for verification.

PROVIDE AN ABN (Advanced Beneficiary Notice) during PROVIDE AN ABN (Advanced Beneficiary Notice) during the first visit to your surgeonthe first visit to your surgeon’’s office:s office:

Your doctors utilize a Surgical Assistant during some surgeries that the hospital or your surgeon deem

necessary, this assistant is not provided by the hospital. The fee for the assistant is 20% of the surgical charge, he/she will bill your insurance carrier, however if your insurance does not cover this service it will be your

responsibility. In addition most insurance plans do not contract with Surgical Assistants and therefore this charge might be an out of network expense, please confirm with your insurance carrier for verification.


Out of Network Legislation Out of Network Legislation examplesexamplesOut of Network Legislation Out of Network Legislation examplesexamples


• COLORADO:West's C.R.S.A. § 10-16-704, "Network adequacy," mandates a certain payment level for claims filed by nonparticipating medical providers under certain specified circumstances.Colorado Out of Network Legislation•ILLINOIS:

1) covered services are not available from a contracted provider; and 2) the member has made a good faith effort to use the services of a contracted provider but such services are unavailable. In these instances, provider/payor agreements must contain a provision whereby the covered member will be provided a covered service at no greater cost than if such service had been provided by a contracted provider (50 IAC 2051.55 (e)(10)(A)). Illinois Out of Network Legislation

Surgical text books, even those that deal most minutely with operative techiques, make scant reference to the duties of the surgical assistant. And yet the skill of the assistant is scarcely less important than the skill of the surgeon himself. In an operation the surgeon must depend, not only upon the experience and the caution of the anesthesiologist, but also upon the familiarity with aseptic details, the foresight and adaptability, and the coolness in emergency of those who aid him in the mechanical procedure itself.

Manually, he must help in the procedure; mentally, he must himself undertake it; he should be not be a pair of hands alone but a brain as well.

If, in the light of his greater experience, the surgeon deems unworthy of adoption any suggestion, however sensible, that should seldom be a cause for offense. During an operation especially, the assistant will do well to keep his mouth closed and his eyes open. If he observes this rule, both as a matter of decorum and as an aseptic principle, an ocassional suggestion, introduced differentially, will be regarded with respect, - otherwise it will be as unwelcome as it is apt to be unwise.

The Surgical Assistantl, Walter M. Brickner, B.S., M.D.,Chief of surgical departmentMount Sinai Hospital, New York CityThe International Journal of Surgery; 1907

Questions?Questions?Questions?Questions?


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Out of Network overview for Surgical Assistants

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