Understanding Blue Shield's Narrow-network Plans

October 25, 2014
P.J. Cloud-Moulds

The rules for being an out-of-network provider with California's new healthcare exchange plans just changed. Here's what you need to know.

Over the past few months, we've found that Blue Shield of California and their healthcare exchange narrowed-network/mirror plans stopped processing claims as they were normally doing. Because our practice is out of network with these plans, the patient typically pays the entire amount due upfront, based upon their deductible and copay, and the insurance company sends the patient a reimbursement check.

What has been happening now is that Blue Shield has been paying the provider directly. So, over the last month or so when the practice's billing representative would call Blue Shield, the customer service representatives would say, "Oh, no. That processed incorrectly, we will need to recoup that money from you and send the patient a check." Only that is not happening.

Yesterday, our billing representative called Blue Shield's provider relations department and found out a whole new story. Apparently as of Sept. 1, all providers are now being sent the check directly, instead of the patient. The manager said, "You should have received a letter telling you about this." Of course, being out of network, we did not. The manager claimed that everyone received it. Wrong again. So, our billing representative asked for a copy of the letter.

Keep in mind that the manager of provider relations stated that as of Sept. 1, providers would be reimbursed instead of patients. Upon review of the letter, it is actually dated Sept. 19, and the effective date for the change was Sept. 14. Also, remember that Blue Shield's own representatives were not aware of this reimbursement policy change.

What we have done now is made a list of all patients that fall under these types of plans. We have drafted a letter to them explaining Blue Shield's new policy change, and then we send the refund check directly to the patient for having pre-paid their bill.

I believe these plans are some of the worst out there on the market. Patients were not made aware of providers' out-of-network status, and even the insurance company's website incorrectly shows providers as in-network for these plans. That's wrong and misleading. There is a reason providers did not sign up for these low paying plans. They would be cutting their reimbursement almost in half for the same amount of time, effort, and energy. These plans also have very high out-of-network deductibles. This means that a patient has to pay $5,000 to $10,000 in deductibles before the plan ever contributes a penny. All the while, the patient has to pay a $300 to $400 monthly premium.

This is one example of the fiasco that the Affordable Care Act has created in our state. The amount of time and effort required to know what is going on with these plans is mind-boggling. Education for billing staff and front- and back-office staff, time spent on the phone with the insurance company, patient education, and calculating reimbursement amounts all require significant work on the practice's end. The providers and the patients are the ones paying the price for these plans.

So, please be aware of your payer mix and plans that fall under the ACA. Be sure you know the company's policy on reimbursement, and check back into the provider relations department or on the insurance company's website for any updates or changes. You'll thank yourself for being diligent.