For most Covered California consumers there will be only one PPO health plan to select. Blue Shield is the only health insurance company participating in Covered California that will offer a PPO health plan in the major metropolitan regions of California. While the PPO plan design signals to consumers that they have some freedom to use out-of-network providers, the Blue Shield benefits may be very restrictive.
PPO Out-of-Network Benefits
Many people like the security of out-of-network coverage that a PPO offers. With a PPO, if an acute and life threatening disease should strike, plan members can seek treatment anywhere in the United States and potentially have the vast majority of the expenses covered. While there is still some coverage for out-of-network providers, consumers need to read the fine print of the Blue Shield PPO plans to understand their exposure to those costs. Gone are the days of a plan member hitting their out-of-network maximum out-of-pocket amount and the health plan picking up the tab for the rest of their health care costs.
Participating vs. Non-Participating Providers
Blue Shield PPO plans have two columns related to member cost-sharing: Participating Providers and Non-Participating Providers. Participating providers are doctors, hospitals and other providers who have agreed to a specific reimbursement or contract rate for Blue Shield members. These are the network providers. Regardless of whether the service is subject to any plan deductible, the Participating Provider will only invoice for a set contracted amount. The details of the specific health plan spell out if the plan members pays all the billed amount (health care costs subject to the deductible), pays a set copayment amount, or shares the cost with the Blue Shield in the form of a coinsurance percentage.
Non-Participating Providers have no contract with Blue Shield for their individual and family plans. They can charge whatever they like. Non-Participating Providers are traditionally referred to as out-of-network. The two columns of the PPO plan specify how charges from both the Participating and Non-Participating Providers will be applied for the member. Each column has a maximum out-of-pocket amount, but the Non-Participating Provider column still may not cover in full the cost of health care services once the member has met it.
2017 Blue Shield Maximum Out-of-Pocket Amounts
|Participating Provider||Non-Participating Provider|
Out-of-Network Allowable Amount Limitations
Most health plans will only recognize an Allowable Amount for out-of-network services. For example, the Allowable Amount for arthroscopic knee surgery may be $800, but the surgery center of the out-of-network hospital charges $1,000.
If the member has not met the out-of-network (OON) deductible, the member must pay the full $1,000, but only $800 (Allowable Amount) accrues toward meeting the OON deductible and maximum out-of-pocket.
If the member has met the OON deductible, but not the OON maximum out-of-pocket, and the plan has 50% coinsurance, the member pays 50% of the $800 (Allowable Amount) PLUS the $200 to make up the balance of the $1,000 bill.
If the member has met the out-of-network maximum OON amount, the health plan covers the $800 (Allowable Amount) and the member has to pay the $200 balance.
Blue Shield has simplified their OON Allowable Amounts for some services by specifying an upper limit regardless of the type of service.
- Outpatient surgery performed at a freestanding ambulatory surgery center: $300
- Outpatient surgery performed in a hospital or hospital affiliated ambulatory surgery center: $500
- Outpatient visit: $500
- High cost imaging services (CT scans, MRIs, PET scans): $500
- Inpatient non-emergency facility fee: $2,000 per day
Even if the cost of the invoiced surgery is $1,000 from an outpatient surgery center, the member will only receive $300 as accruing toward their Non-Participating Provider deductible and maximum out-of-pocket amount. If the member has met their Non-Participating Provider calendar year maximum out-of-pocket, Blue Shield will only pay $300 toward the surgery center ($500 if it is affiliated with a hospital), or $2,000 toward an inpatient hospital stay.
While the Enhanced Silver plans (73, 87, 94) have reduced Non-Participating deductibles and maximum out-of-pocket amounts, the same Allowable Amount limitations apply.
Blue Shield Limits Their Exposure To High Cost OON Providers
By including an upper limit Allowable Amount for many Non-Participating Provider charges, Blue Shield has limited their exposure to OON costs. They have shifted more of the costs to the members. Blue Shield doesn’t mention if the Allowable Amounts are based on any usual or customary rates (UCRs) or if the dollar amounts were pulled out of a hat. Because Blue Shield has shielded itself from exorbitant OON costs by implementing hard caps on Allowable Amounts, they can keep their rates lower.
In other words, Blue Shield is limiting potential claims reimbursement for OON providers closer to, or possibly lower, than what they would pay to their Participating Providers. This means they don’t have to factor into their individual and family plan rates the possibility of paying $100,000 for some member’s cancer treatment at some world renowned cancer treatment center that is not a Participating Provider. The specific upper limit Allowable Amounts protect Blue Shielded from paying a significant portion of some OON invoices.
With the potential for a bulk of OON expenses to fall upon the member because of the Blue Shield’s upper limit Allowable Amounts, consumers have to wonder if paying for the PPO plan is really worth it. While Blue Shield’s plan can be quite a bit more expensive than competing EPO in some regions, their PPO plans can have lower rates than some HMOs and EPOs in other counties of California. Either way, consumers should carefully consider the value of the Blue Shield PPO benefits versus the premiums for it and competing health plans in their region.
2017 Blue Shield Summary of Benefits PPO Plans
- Bronze 5550 PPO 1-17 (0.1 MiB)
- Bronze 60 HDHP PPO 1-17 (0.2 MiB)
- Bronze 60 PPO 1-17 (0.1 MiB)
- Gold 80 PPO 1-17 (89 KiB)
- Minimum Coverage PPO 1-17 (0.1 MiB)
- Platinum 90 PPO 1-17 (89 KiB)
- Silver 1850 PPO 1-17 (0.1 MiB)
- Silver 70 PPO 1-17 (0.2 MiB)
- Silver 73 PPO 1-17 (0.1 MiB)
- Silver 87 PPO 1-17 (96 KiB)
- Silver 94 PPO 1-17 (94 KiB)
- Silver Seven 3750 PPO 1-17 (95 KiB)