Caught In the Middle
By Monrovia Weekly
Published: Thursday, March 27th, 2008
When Your Doctor or Hospital Drops Your Health Insurance Company
By John Barrett
With front page articles in the Arcadia Weekly detailing the termination of the provider contract between Methodist Hospital in Arcadia and Blue Cross of California, a number of readers have asked me “What really happens if my doctor or the hospital near me terminates its provider contract with my insurance company?”
Under normal circumstances, when you visit a doctor or hospital listed as a provider with your insurance company, the reimbursement amounts for medical services have been agreed upon under the provider contract. The actual contract for payment of services is between the doctor or hospital and the insurance company, not between patient and the medical provider.
As an example, the cost of a standard office visit might be listed as $125, but the actual amount paid by an insurance company under the provider contact might only be $75. Even though the visit was billed for $125, and paid $75 by the insurance company, the provider could not collect the $50 difference from the patient.
The real question is: “what happens if I decide go to “out of network” provider? What that means to your wallet is that you will pay a significantly higher amount if you go to an out of network provider. The insurance company will only reimburse for services according to a “usual and customary” schedule. In addition, most insurance policies have a higher deductible and much higher out of pocket costs for going to an out of network provider. This might not be a problem for a $125 office visit, but if you are facing a $20,000 bill for medical expenses because you chose to go to doctor or hospital not contracted with your insurance company it suddenly becomes a problem.
If you discover, as in the case of Methodist Hospital that it has terminated its provider contract, your choice is to go to a different hospital in the area (assuming your doctor has the ability to practice at that hospital). If you doctor terminates their provider contract with your insurance carrier it gets more complicated. Your choice if you have an individual policy, is to change insurance carriers, a relatively simple task. But what happens if you have group coverage or have a pre-existing condition that eliminates the ability to change insurance carriers? Be prepared to change doctors!
All insurance carriers have a list of providers accessible on their websites. Before you change insurance carriers make sure that your doctor and hospitals in your area are providers with you new insurance company.
To contact Mr. Barrett for further information or to ask a question please email him at John@healthinsbrokers.com or call him at (626) 797-4618
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Caught In the Middle | Monrovia Weekly is GREAT and Rich Manivong was here! Bet you wish you were too.