A recent article by USBenefits’ Mike Lanza was featured in MyHealthGuide on 2/14/22, and can be found below.
Is paying cash better than using your insurance when it comes to medical bills?
With the new Centers for Medicare & Medicaid Services (CMS) Hospital Price Transparency rule, there has been some research that indicates the cash price may be lower than the commercial insurance negotiated price.
Is this accurate? How does this impact self-insured plans?
While the cash price may be lower, this price is mainly for those that do not have insurance. Providers know that if a person is not insured, their ability to command a rate that is paid by commercial payers is not possible. Therefore, they may lower their prices to a level they believe will be paid by the patient in attempt to receive something, rather than nothing.
But there are risks to the patient paying cash. For example, if complications arise during the procedure, the initial cost might increase. In this case, the patient may not be able to pay these extra costs or negotiate a good deal after the service is rendered.
For those with insurance, paying cash may put them in a position where they do not have the protection of the Plan Document (Plan) since they will more than likely be going to an out-of-network provider. What if there is a dispute with the provider?
Paying cash may help those without insurance, however it can have the opposite effect on those with insurance. The reason being, is that the provider will have to cost shift to make up for those without insurance by charging more for those with insurance.
This may not seem fair, but it’s the reality that the self-insured industry continues to face. So how do self-insured plans find the right balance to ensure they are not paying too much? The claim payer must have guidelines in place to make sure they are reviewing both in and out-of-network claims that fall outside of a reasonable reimbursement rate. Claim payments must be held until all necessary information is received and reviewed closely.
This may include itemized bills, operative notes, discharge summaries, etc. A provider may push back on requests for additional documentation, but a claim is not “clean,” (payable at the PPO rate), until all concerns regarding the claim have been reviewed and addressed by the payer. Not to mention, self-insured plans have a responsibility to ensure they are paying claims appropriately.
At USBenefits Insurance Services we partner with some of the top claim review firms (third-party administrators, cost containment, bill review, physician & nurse consultants, etc.) in the country and will support the TPA/Plan with claim review to ensure the payment is appropriate. USB will take the lead on claim reviews and pay the associated claim review fees so there is no additional costs to the Plan. This is a win, win, win for everyone. The TPA doesn’t have to worry about how the claim will be reimbursed by stop loss, the Plan will see lower claim costs, leading to better stop loss renewal rates, USB will see lower claim reimbursements, and everyone experiences a favorable client retention and customer experience. USB has a track record of reducing claim payments below the PPO rate by getting signed agreements with providers, which means there are no appeals down the road.