January 09, 2020
Eliminating out-of-network (OON) coverage may sound like a disruptive move, but several employers have been successful in steering employees toward higher-quality in-network providers and reducing costs by removing coverage for OON providers. Some best practices to follow:
Analyze Your Data
Consider your geographic footprint and review your claims data to determine if eliminating OON coverage would likely result in savings for your organization and to assess the level of disruption for your members. Utilization of OON services varies by region and service type. Employers should assess their major markets for OON claims, including the prevalence and dollar amounts of the claims. Based on current levels of coverage, OON charges and in-network negotiated rates, a claims cost estimate of shifting that care in-network should be possible. Keep in mind that shifting care to in-network providers should also cut down on fraudulent and abusive billing.
Communicate early, often and in a variety of channels
Several months in advance of implementation, employers should send direct communications to any plan members who are utilizers of OON services to make sure they are aware of the changes and help them identify available in-network providers accepting new patients. This also allows the employer to explain the reasons for the change and its benefits, especially for employees who may be most skeptical and/or concerned about the change. Additional partners should be included in member communications strategy:
- Vendor partners and local HR benefit teams that interact with your plan members should be educated about the new benefit design, through positive messaging suggestions for the reasons for the change and tools for helping employees find appropriate in-network providers.
- Advocacy and care management teams, from both third-party vendors and health plans, should assist in direct member outreach to employees with past OON claims.
Provide robust, mobile enabled tools for employees to find in-network options
Identifying in-network providers can be a frustrating experience for employees, who are often told by their health plan to not trust their health plan’s own provider directories! On top of that, some in-network providers aren’t taking new patients. To make sure that employees are equipped with the resources and information they need to find an in-network provider who is right for them, employers should consider working with vendor partners, such as the following:
- Concierge service providers
- Intensive case management teams at health plans
- Transparency tool vendors
Encourage OON providers to join the Network
If there are OON providers or groups that do a high number of services for your plan members, consider reaching out to inform them that their patients will be losing any OON coverage. This communication should encourage the providers to join the plan’s network. At least, it will hopefully motivate these providers to discuss cost of care, their treatment plan, and potential options for seeking in-network care with their patients.
Allow for Continuation of Care and Consider Exceptions Early in Implementation
It is extremely unlikely that everyone impacted by this benefit design change will get the message before implementation. Therefore, employers should consider incorporating a grace period into the rollout process. That will give employers time to remind any employees who submit OON claims that, going forward, they’ll no longer receive any coverage for those services. When sending this message, be sure to include links to resources to help those plan members identify in-network providers accepting new patients.
Make sure you comply with mental health parity law
If you’re eliminating OON benefits for all health care services, including physical and mental health services, you should not run afoul of mental health parity law. However, eliminating OON benefits for only mental health services, such as SUD treatment, without having a commensurate OON elimination for some physical health services, leaves the plan vulnerable to legal action.
Continue to provide in-network coverage for those who don’t have in-network providers in their geography
Some employees, particularly in rural areas, may not have in-network providers available within a reasonable distance. Employers should provide reasonable exceptions to cover OON services for plan members who do not have local in-network options. Given that these providers are OON, employers will need to choose a reimbursement rate, such as a percentage of usual and customary charges or Medicare rates. The claim should apply to the member’s deductible, like any other in-network service.
Employer Case Study – Consumer Products Manufacturer
When pitching the idea to eliminate OON benefits to senior leaders at this company, health benefits leaders’ business case included three major points:
- Utilizing in-network providers protects employees (and the plan) from fraudulent and abusive billing practices.
- Employees pay less when using in-network providers; negotiated rates are approximately 50% lower than non-negotiated OON charges.
- Members would be directed to higher-quality providers that are vetted through carrier contracting processes.
This large employer eliminated OON benefits beginning January 1, 2017, and first year results were very encouraging. The change generated significant savings, contributing to a negative cost trend for the year. Employee noise and disruption were minimal due to an effective a communication and transition strategy. In key OON use areas, including physical therapy and substance use disorder treatment, overall patient visits remained steady, but costs decreased, and appropriate care was covered at in-network rates. Advocacy and care management teams were heavily engaged in high-touch transition plans to support heavy OON utilizers transition to in-network care.
Several strategies contributed to the company’s success:
- Changes were communicated to employees beginning six months prior to when they “went live.” Members with recent OON claims were contacted directly to alert them of the change and to suggest available resources to help them identify in-network providers.
- Communications emphasized the broad networks offered by their health plans, as well as the quality benefits of staying in-network.
- Exceptions for emergency care and on a case-by-case basis for people without appropriate in-network providers, with a specific focus on behavioral health issues, ensured a smooth transition for those with a continued need to utilize OON providers.
- Regional HR staff, labor representatives and vendor partners were given specific talking points and training to prepare them to address member concerns and needs.
- 1 | National Business Group on Health. 2019 Large employers’ health care strategy and plan design survey. 2018. https://www.businessgrouphealth.org/resources/2019-large-employers-health-care-strategy-and-plan-design-survey
- 2 | O’Malley A, Reschovsky J. No exodus: physicians and managed care networks. 2006. Center for Studying Health System Change. Accessed August 30, 2018. http://www.hschange.org/ CONTENT/838/
- 3 | Hurtibise R. Citing fraud by substance abuse centers, Cigna withdraws from Florida’s health insurance exchange. October 16, 2015. http://www.sun-sentinel.com/business/consumer/fl-cigna-pullout-offlorida-health-insurance-exchanges-20151016-story.html
- 4 | Kyanko K, Curry L, Busch S. Out-of-network provider use more likely in mental health than general health care among privately insured. August 2013. Med Care. 51(8): 699-705 https://www.ncbi.nlm.nih. gov/pmc/articles/PMC4707657/
- 5 | Schulte F, Lucas E. How doctors are getting rich on urine tests for opioid patients. November 6, 2017. Kaiser Health News. https://www.bloomberg.com/news/features/2017-11-06/how-doctors-are-gettingrich-on-urine-tests-for-opioid-patients