In the case of this specialty genetic laboratory test, the lab billed $8,000 for the test. The health plan determined that the Allowable Amount was $3,000 for the test. The health plan paid 50% of the allowable amount in the form of a check to the plan member. Oddly, the Evidence of Billing indicated that none of the $8,000 claim was covered, even though they sent a check to the plan member for 50% cost-sharing for the test. Regardless, the plan member is still responsible for full $8,000 to the lab for the test.
The health plans don’t recognize the invoiced amount of the health care services from out-of-network providers as either accruing toward the deductible or for their cost-sharing of 50% before the maximum out-of-pocket amount is met. The health plans apply a Usual and Customary Rate (UCR) or the Allowable Amount. This limits their responsibility for payment and increases the health plan members costs.
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.
The narrow doctor networks of California’s individual and family health insurance plans are actually smaller than first thought as doctors use a bait and switch tactic to lure in patients and then bill for their services with “out-of-network” providers. The health insurance companies have little control over this practice that has a doctor listed as in-network for their health plan, but the services are actually billed by a facility that is out-of-network. This bait and switch tactic, aided and abetted by confusing online provider search tools and opaque billing statements and codes, leaves consumers paying more for health care services than they should.
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.