While Covered California standard benefit design health plans have very specific limitations on member responsibility for in-network health care services, the coverage for out-of-network services can vary greatly between PPO health plans. The insurance carriers that offer PPO health plans through Covered California (Anthem Blue Cross, Blue Shield of California, and UnitedHealthcare) with out-of-network coverage seem to have made up their own rules for this PPO benefit. Because the Covered California individual and family health plans have such narrow networks, many families are finding that they must go out-of-network to receive certain health care services.
PPO Out-of-Network Coverage Costs
One of the marketing points of Preferred Provider Organizations (PPOs) is that they offer some coverage for providers like doctors and hospitals out of the preferred provider network of the health plan. This out-of-network benefit usually increases the overall premium rate of the PPO plan relative to EPO and HMO plans that offer no out-of-network coverage. (All California health plans must treat any emergency room treatment and admission anywhere in the United States as in-network even if the providers are out-of-network.) But unlike the very specific rules for accessing health care with in-network providers and the cost to the health plan member, there seem to be few uniform rules for out-of-network benefits. The lack of uniformity with regards to an out-of-network deductible, coinsurance, and maximum out-of-pocket maximum, makes it difficult for consumers to compare the PPO plans.
Summary of Benefits and Coverage amounts
From the federally mandated Summary of Benefits and Coverage document that each health plan must issue, I compiled a spreadsheet of the out-of-network deductible, coinsurance, and maximum out-of-pocket for the three carriers offering standard benefit design PPO plans through Covered California. Within the framework of a PPO plan, there are two columns in which health care service costs accumulated into: In-Network and Out-of-Network (OON). This comparison is only for the out-of-network coverage benefits included with standard benefit design health plans purchased either through Covered California or directly with the carrier.
- OON Deductible: if the plan has an OON Deductible, it is the cost of the health care services that the member must pay before the health plan will enter into cost-sharing or coinsurance with the member.
- OON Coinsurance: after any OON deductible has been met, this is the percentage that the member will have to pay for OON services under certain conditions. For example, if the health care service is $1,000 and the OON coinsurance is 50%, the member would be responsible for paying half or 50% of the cost.
- OON Maximum Out-of-Pocket (MOOP): the OON maximum out of pocket amount is the combination of the OON Deductible and OON Coinsurance. Once the Maximum MOOP is met, the health plan, under certain conditions, will pick up the rest of the costs for the remainder of the calendar year.
Unlike in-network services, the carriers can attach all sorts of little conditions that end up pushing more costs back onto the member. Consequently, it is important to understand how out-of-network services will be treated so the individual or family can determine how much their share of cost will be for utilizing OON providers. Summary of Benefits and Coverage are listed for download at the end of the post.
Anthem Blue Cross
In general, the California Blue Cross PPO plans have an OON deductible and MOOP that decreases as the metal tier increases. From the Silver plans up to the Platinum the OON deductible is level at $5,000 before the member goes into coinsurance. The MOOP starts off at $18,000 and then steps down to $10,000 for the Gold and Platinum plans.
Anthem Blue Cross offers Tiered PPO plans in the counties of San Francisco, Los Angeles, Orange and San Diego. The tiered structure has some hospitals at tier 1 and others at tier 2. If a plan member uses a tier 2 in-network hospital, they will have to pay higher coinsurance to use those tier 2 facilities. Anthem has extended the higher coinsurance into the OON services. Plans in a Tiered PPO region will have higher member coinsurance than members in a Non-Tiered county or region.
Blue Shield of California
The Blue Shield plans generally have lower OON deductibles and MOOP amounts than Blue Cross. The Gold and Platinum plan even have no OON deductible similar to the in-network side. However, you have to read the fine print on the Summary of Benefits and Coverage (SBC) included on all the documents.
The amount the plan pays for covered services is based on the allowed amount. If a non-participating provider charges more than the allowed amount, you may have to pay the difference. For example, if a non-participating hospital charges $1,500 for an overnight stay and the allowed amount is $1,000, you may have to pay the $500 difference. (This is called balance billing.)
Blue Shield very clearly identifies what the Allowed Amount is on the SBC. For an MRI the Allowed Amount is $500, $300 for outpatient surgery, and $2,000 a day for in-patient hospital stays. Some services also require prior authorization. While the overall OON structure looks somewhat reasonable, the Allowed Amounts, if artificially and unreasonably low for some providers, means the members will be hit for huge OON costs that are not covered by Blue Shield.
The Allowed Amounts can vary by insurance company and they each have their own methodology for computing the amounts. Sometimes references to definition of the allowed amount can be found in the health plans Evidence of Coverage (EOC) document. The Blue Shield EOC for their 2016 PPO plans states,
There are individual and Family Calendar Year Medical Deductible amounts for both Participating Providers and Non-Participating Providers. Deductible amounts for Covered Services provided by Participating Providers accrue to both the Participating Provider and the Non-Participating Provider Medical Deductible. Deductible amounts paid for Covered Services provided by Non-Participating Providers accrue only to the Non-Participating Provider Medical Deductible. – page 4 Silver 70 PPO EOC 1-16 PDF
The UnitedHealthcare (UHC) PPO out-of-network benefits are structured closer to Blue Shield. Virtually all of the UHC OON services require prior authorization and if authorization is not given the member is penalized $250 in some cases. For some OON services, the member who doesn’t get prior authorization will have to pay a $250 penalty just for the privilege of having the amount apply to the OON Deductible if the deductible hasn’t already been met.
Enhanced Silver Plans
It is interesting that at least Blue Shield and UHC make a token attempt to align the OON deductible and MOOP with the reduced member cost sharing of Enhanced Silver Plans 73, 87, and 94. Blue Cross makes no attempt to dull the impact of OON services for members who qualify for the Enhanced Silver Plans. A Blue Cross Enhanced Silver 94 member will have to accumulate $5,000 in OON costs before they go into coinsurance of either 50% or 60%. The same member in either a Blue Shield or UHC Silver 94 plan would only have to meet $150 OON Deductible. This $150 OON deductible follows the traditional rule that the OON Deductible is twice the in-network deductible.
2016 Individual Out of Network Dollar Amounts
|CC Standard Benefit Design Plans|
|Anthem Blue Cross||Deductible||Coinsurance||MOOP|
|Minimum Coverage Tiered||$13,700||60%||$20,550|
|Minimum Coverage Non-Tiered||$13,700||30%||$20,550|
|Bronze 60 H.S.A. Tiered & Non-Tiered||$9,000||60%||$13,500|
|Bronze 60 Tiered||$12,000||60%||$18,000|
|Bronze 60 Non-Tiered||$12,000||50%||$18,000|
|Silver 70 MSP Tiered||$5,000||60%||$15,000|
|Silver 70 MSP Non-Tiered||$5,000||50%||$15,000|
|Silver 73 MSP Tiered||$5,000||60%||$15,000|
|Silver 73 MSP Non-Tiered||$5,000||50%||$15,000|
|Silver 87 MSP Tiered||$5,000||60%||$15,000|
|Silver 87 MSP Non-Tiered||$5,000||50%||$15,000|
|Silver 94 MSP Tiered||$5,000||60%||$15,000|
|Silver 94 MSP Non-Tiered||$5,000||50%||$15,000|
|Gold 80 MSP Tiered||$5,000||60%||$10,000|
|Gold 80 MSP Non-Tiered||$5,000||50%||$10,000|
|Platinum 90 MSP Tiered||$5,000||60%||$10,000|
|Platinum 90 MSP Non-Tiered||$5,000||40%||$10,000|
|Blue Shield of California||Deductible||Coinsurance||MOOP|
|Bronze 60 H.S.A.||$9,000||40% – 50%||$9,500|
|Minimum Coverage is EPO||N/A||N/A||N/A|
|Bronze 60 H.S.A.||$9,000||40% – 50%||$13,000|
Out of Network costs are a hazardous area
The complexity surrounding the costs of OON services and how they accrue toward meeting any OON deductible and MOOP are only fathomable by experienced health insurance employees. This means that most families are at the mercy of the interpretation and explanation of such charges by health insurance representatives who aren’t readily accessible by phone. Plus, mistakes have been known to be made within the billing systems of the health insurance companies to properly recognize and accrue such OON expenses. Suffice it to say that whenever possible use an in-network participating provider. And if you must go out-of-network, be prepared to keep excellent records so you can audit how the insurance company accounts for the OON costs so you receive the benefits outlined in their health plans.
Kaiser Health News: ER Doctors Say Federal Rules Could Raise Patient’s Out-of-Network Bills
Kaiser Family Foundation: States Restriction Against Providers Balance Billing Managed Care Enrollees
- California Footnote: In California, restrictions on balance billing apply only to HMOs and PPOs that are licensed by the California Department of Managed Health Care. These restrictions do not apply to PPOs that are regulated by the California Department of Insurance.
Fortunately for individual and family health plan members in California, most of Anthem Blue Cross and Blue Shield IFP PPO policies are managed by California Department of Managed Health Care and not the Department of Insurance.
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