Considering Going Out of Network in New York? Food For Thought

As insurance companies continue efforts to reduce reimbursement rates and increase administrative burdens on their participating providers, more and more physicians are considering terminating their in-network contracts with private insurance payors and going out-of-network.  If you or your practice are contemplating doing so, here are some issues you may want to consider when making that decision.

 As an out-of-network physician, you are not limited in the fees that you can charge by either in-network negotiated rates (although you continue to be subject to the Medicare fee schedule for Medicare patients should you continue to accept Medicare); you are free to charge any rate that you believe is commensurate with your expertise and the quality of services you provide, subject to the regulations of the New York State.  Generally, absent a contractual agreement, a physician should charge a reasonable and customary fee for your specialty and geographic area.  Keeping in mind, private payors are increasingly attempting to challenge the fees charged by out-of-network physicians.  Some insurance companies are notorious for suing physicians, alleging “excessive” billing/”unconscionable” fees. 

 One of the most common issues that arise in connection with an out-of-network practice is the extent to which an out-of-network physician is required to collect co-payments, co-insurance and deductibles.  When dealing with Medicare and Medicaid – a routine waiver of such payments can constitute a violation of the Anti-Kickback Act or the False Claims Act.  Although those statutes do not generally apply to patients with private insurance, New York has both criminal and civil statutes prohibiting an outright waiver of a co-payment, co-insurance or deductible payment. That said, a physician/practice may occasionally waive a co-payment or deductible following a determination of financial hardship, but this must be done on a case by case basis.  A physician, who, as a general business practice, waives co-insurance, co-payments, or deductibles, may be accused of insurance fraud{15064844894370}[1]{15064844894371}

 An exception to the requirement to balance-bill patients arises when services are rendered by an out-of-network provider to an insured patient seeking emergency treatment at an in-network hospital or facility.  The New York’s Financial Services Law protects patients from being responsible for “surprise bills”.  The recent law, limits the patient’s responsibility to no greater than their in-network co-payments, co-insurance or deductible obligation, as long as, they went to an in-network hospital or ambulatory surgical center, regardless if the emergency services were rendered by an out-of-network provider. 

 It may also be inappropriate to balance bill a patient in various non-emergent situations where the bill would be classified as a “surprise bill”.  Financial Services Law § 603(h) defines a “surprise bill” as a bill for health care services, other than emergency services, received by: 

(1) an insured for services rendered by a non-participating physician at a participating hospital or ambulatory surgical center, where a participating physician is unavailable or a non-participating physician renders services without the insured’s knowledge, or unforeseen medical services arise at the time the health care services are rendered; provided, however, that a surprise bill shall not mean a bill received for health care services when a participating physician is available and the insured has elected to obtain services from a non-participating physician;

(2) an insured for services rendered by a non-participating provider, where the services were referred by a participating physician to a non-participating provider without explicit wr