Doctor's Orders: Insurance Considerations

The relationship between doctors and insurance companies is complex and ever-changing. Doctors are not required to accept health insurance plans or the rates that insurance companies decide to pay. Some doctors only work with limited insurers, while others are cash-only. In recent years, many physicians have been dropping insurance plans due to low reimbursement rates, stringent rules, and burdensome paperwork. This shift has resulted in unexpected out-of-pocket expenses for patients, who often have to pay the difference between the doctor's fees and the insurance reimbursement. To avoid this, patients can opt for doctors within their insurance network or choose providers who participate in point-of-service (POS) collections, where payment is requested before the service is rendered.

Out-of-pocket expenses

In the US, out-of-pocket healthcare expenses have more than doubled in the past decade, with total out-of-pocket healthcare payments surpassing 433 billion dollars in 2021. This is due to rising healthcare costs and the threat of medical debt. Out-of-pocket costs are rising much faster than workers' wages, and this is a reason why many people with health insurance find themselves in medical debt. According to a 2021 survey, nearly 40% of US adults have medical-related debt.

There are several types of out-of-pocket costs, including:

• Non-covered services: If you seek a medical service that your insurance doesn't cover, you will have to pay for it completely out of pocket. Many types of cosmetic surgery and non-prescription drugs fall into this category.
• Maximum out-of-pocket costs: Most health insurance plans have a limit to how much someone will pay out of pocket. These limits, or maximum out-of-pocket costs, represent the maximum amount someone can pay for services before their insurance starts to cover costs in full.
• Deductibles: The amount you pay each year for covered costs before your insurance coverage kicks in.
• Coinsurance costs: How much your insurance will pay and how much you will have to pay out of pocket after you meet your deductible amount.
• Copays: Some insurance plans require participants to pay a set amount of money for specific healthcare services, such as certain types of doctor visits or prescription drug purchases.

It's important to understand your healthcare plan and know exactly what it will and won't cover to avoid unexpected out-of-pocket expenses.

Cash-only doctors

The cash-only model has several benefits for both doctors and patients. For doctors, it means greater autonomy, less time spent on paperwork, and more time to spend with patients. It also means they can set their own prices, cut down on administrative costs, and build better relationships with their patients. For patients, it means greater transparency and often, lower costs. Patients pay an annual or monthly fee for access to their doctor, which covers most primary care procedures and gives them 24/7 access to their doctors, longer office visits, and same-day appointments.

However, there are some downsides to this model. Doctors may have to spend more time on the business side of their practice, marketing their services and negotiating prices. There is also a risk that this model may not be accessible to those who cannot afford to pay out-of-pocket expenses, particularly those on Medicaid.

Overall, the cash-only model has the potential to improve the doctor-patient relationship and provide more affordable healthcare options for patients. However, it is important to carefully consider the potential benefits and drawbacks before switching to this model.

Medicare coverage

Medicare is the federal health insurance program for people aged 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease. There are four types of Medicare coverage, or "parts":

• Part A (Hospital Insurance) covers inpatient hospital stays, care in a skilled nursing facility, hospice care, lab tests, surgery, and some home health care.
• Part B (Medical Insurance) covers certain doctors' services, outpatient care, medical supplies, durable medical equipment, home health care, and some preventive services.
• Part C, or Medicare Advantage, is a Medicare-approved plan from a private company that offers an alternative to Original Medicare (Parts A and B) for health and drug coverage. These plans include Part A, Part B, and usually Part D, and may offer extra benefits like vision, hearing, and dental services.
• Part D provides prescription drug coverage, including many recommended shots or vaccines.

Medicare typically pays doctors only 80% of what private health insurance pays, and physicians are not required to accept Medicare patients. If your doctor doesn't accept Medicare, you have several options, including:

• Staying with your doctor and paying the difference
• Requesting a discount
• Visiting an urgent care center
• Asking your doctor for a referral to a physician who does accept Medicare
• Searching for a Medicare-enrolled doctor in Medicare's Physician Compare directory

With the exception of premium-free Part A, which is available to people who paid Medicare taxes while working, Medicare enrollees pay monthly premiums for their coverage. In 2024, the standard Part B premium amount is $174.70 per month.

Preapproval requirements

Preapproval, also known as prior authorization, preauthorization, or precertification, is a requirement by health insurance providers for patients to obtain approval for a health care service or medication before the care is provided. This process is initiated by the treating health care provider, who must contact the insurer to obtain approval before the patient receives care. The preapproval process is necessary to ensure that the requested service or medication is covered by the patient's insurance plan and to avoid unexpected costs for the patient.

The specific preapproval requirements vary depending on the insurance plan and the type of service or medication being requested. In general, more expensive or invasive treatments, such as surgeries, MRIs, or hospital visits, are more likely to require preapproval than routine office visits. It is important for patients to review their insurance plan policies and understand the preapproval requirements for their specific plan.

During the preapproval process, the insurance provider will evaluate the medical necessity of the requested service or medication. They will also consider whether the treatment follows up-to-date recommendations and if there are more economical treatment options available. Additionally, the insurance provider will check for duplication of services, especially when multiple specialists are involved in the patient's care.

For patients receiving care from an in-network healthcare provider, the preapproval process is typically handled by the provider on the patient's behalf. However, for out-of-network care, patients may need to organise the preapproval process themselves. It is crucial for patients to double-check with their insurance plan to ensure that all preapproval requirements have been met to avoid unexpected costs.

Preapproval is also commonly required for prescription medications, especially more expensive ones. In some cases, insurance plans may require patients to try alternative medications before approving a specific prescription. There may also be limits on the amount of medication that can be dispensed at one time or the number of refills allowed. If the patient's healthcare provider believes that the insurance plan's preferred medication is not suitable or safe for the patient, they can appeal the decision.

While preapproval is not required for emergency care, it is often necessary for elective or non-urgent procedures and treatments. Patients should contact their insurance provider to understand the specific preapproval requirements for their plan and to avoid unexpected out-of-pocket expenses.

In-network vs out-of-network

A provider network is a list of the doctors, health care providers, and hospitals that an insurance plan contracts with to provide medical care to its members for agreed-upon prices. Providers who accept these contracts are called "in-network providers". They have agreed to accept a discounted rate for covered services under the health plan.

If a doctor or facility has no contract with your health plan, they're considered out-of-network and can charge you full price. This is usually much higher than the in-network discounted rate.

When you choose a health insurance plan, you will typically have access to a specific provider network. It's important to understand these differences when choosing a plan to meet your specific needs.

• Cost: Out-of-network costs can add up quickly, even for routine care. If you have a serious illness or injury, it can mean paying thousands of dollars more. In-network providers have agreed to accept a discounted rate, so you will typically pay less for medical services received.
• Choice of Provider: Not all doctors accept health insurance, while others only work with limited insurers. It's important to check if your preferred doctor is in-network before signing up for a health insurance plan.
• Billing and Payment: With out-of-network providers, you may have to pay the full amount of the bill during your office visit. In-network providers, on the other hand, will not bill you for the difference between their charges and the insurance reimbursement.
• Insurance Coverage: Out-of-network providers may not be covered by your insurance at all, or only partially. Many insurance plans, such as Health Maintenance Organizations (HMOs), rarely cover out-of-network providers unless it's an emergency visit.
• Referrals: If you need to see a specialist, your insurance plan may require a referral from your primary care provider (PCP) or in-network specialist. This can be an important factor in determining whether to stay in-network or go out-of-network.

In summary, choosing an in-network provider will typically result in lower out-of-pocket costs and fewer billing surprises. However, there may be times when you feel it is necessary to go out-of-network, such as for specialized expertise or geographic accessibility. In these cases, it is important to understand the potential costs and how your insurance plan will cover them.

Frequently asked questions