An often-underutilized and misunderstood strategy for maximizing out-of-network provider reimbursements for surgical services is the ‘in-network’ or ‘gap’ exception that can be authorized by health insurance companies on a case by case basis. Regardless of whether a patient’s policy is an EPO, HMO or PPO, out-of-network specialists performing complex surgeries, should be routinely requesting an in-network exception on behalf of patients during the preauthorization process, for when it is granted, it can be a win-win for patients and providers alike.
What Is An In-Network or Gap Exception?
An authorized in-network exception is a determination made by an insurance payor to provide coverage for medical services rendered by an out-of-network (non-participating) provider at a level of coverage and cost share equivalent to that which would be applied to the same services if rendered by an in-network (participating) provider. This means that the patient will only be subject to their in-network cost sharing obligations (deductible, co-insurance or co-payment).
An in-network exception is generally granted when a patient’s commercial insurance plan does not have any providers available in-network that:
- Can see the patient within a reasonable amount of time; or
- Is within a reasonable distance to the patient; or
- A participating provider is not qualified to evaluate or treat the patient’s condition.
In other words, the in-network exception speaks directly to network adequacy, a growing problem in the health insurance industry as insurance companies continue to narrow networks. The in-network exception is granted when health insurance companies have gaps in their network of contracted healthcare providers; thereby authorizing a patient to receive healthcare services from an out-of-network provider and limiting the patient’s cost sharing responsibility to their in-network benefits.
What Does In-Network Exception Do for Providers?
For out-of-network providers, an authorized in-network exception is a contract between the physician to provide services in exchange for payment by the commercial insurance company. This theory is supported by recent and evolving case law. For the patient, it is a promise by the insurance company that the patient will not be liable for balance bill amounts above their in-network cost sharing obligations. It does not however mean that provider is subject to the patient’s in-network benefit rate — a common misconception made by providers. Instead, it can lead to the insurance company negotiating with the out of network provider to resolve the claim in lieu of provider balance billing the patient — a win for the provider and the patient.
When To Request An In-Network Exception
How does an out-of-network provider determine when it is appropriate to request an in-network exception? Much like any other business, an out-of-network provider must evaluate the marketplace and location where the practice will be operating. Below are examples of appropriate scenarios for requesting an in-network exception:
- provider is the only specialist performing a complex or rare procedure that few or no other providers perform in a geographic area and/or,
- Provider is performing a procedure in a hospital where no in-network physicians have privileges, and/or,
- Insurance company provides patient with a list of in-network physicians for consideration that may have a track record of poor outcomes, do not perform the procedure or do not specialize in the technique the patient desires.
Persistence Pays Off
Exceptions purposefully fall outside normal operating procedures and therefore authorization alone is not a guarantee of proper payment for a provider. It is necessary to carefully monitor compliance of the agreement throughout the claim management cycle. Once an initial payment is made and, in the event, the in-network exception was not honored, the provider must act timely to appeal the claim with all required authorizations to pursue reasonable reimbursement and to effectively limit the patient’s financial liability. These requirements can be cumbersome and time consuming for internal staff and billing companies and out of network providers should look to specialists in this area to maximize the reimbursement for their services.
