A brief overview of being out of network for third party payers for surgical assistants.

1. IN NETWORK AND OUT OF
NETWORK BILLING
Illinois Surgical Assistant Association Luis F. Aragon, RSA
Surgbill
Association of Surgical Assistants

2. What does being “out of network”
mean ?
• Very simply, it refers to a
provider that does not
have a contract with an
insurance carrier.
Luis F. Aragon, RSA
Surgbill

3. RISKS OF BEING OUT OF NETWORK
Business Risks:
In the majority of instances, quick payment is
not the case with out-of-network claims, despite
the fact that most states require claims to be
processed and paid in a timely manner.
Statistically, about a third of cases are paid
within 60 days. However, in the balance of
those cases, payment is delayed, sometimes
significantly because of additional questions
and further information requested by the
insurance carriers.
Luis F. Aragon, RSA
Surgbill

4. Life Cycle of an Insurance Claim
Luis F. Aragon, RSA
Surgbill

5. RISKS OF BEING OUT OF NETWORK
• Business Risks:
Another huge problem involves various
attempts by insurance carriers to avoid
paying at UCR charges. A typical example is
the artificial fee schedules applied by some
carriers in certain states. The insurer agrees
to pay a certain percentage of billed charges
calculated commonly by its determination of
UCR charges, reserving the right to
reimburse the lower amount of the two. But
who determines this charge?
Luis F. Aragon, RSA
Surgbill

6. RISKS OF BEING OUT OF NETWORK
• Business:
Being out-of-network requires continued,
extensive training and education for
providers and their office staff, their
surgeon’s staff and patients. A great surgical
experience can be damaged when several
weeks after a procedure the patient receives
what they might think is an enormous bill, but
it could simply be the Explanation of Benefi
ts (EOB). Patients must be educated so that
they understand what the EOB is and the
process and responsibilities associated with
payment.
Luis F. Aragon, RSA
Surgbill

7. RISKS OF BEING OUT OF NETWORK
Legal and Regulatory
State based (out of network legislation)
Waiver of co-insurance and deductibles
Luis F. Aragon, RSA
Surgbill

8. Clean claim
Luis F. Aragon, RSA
Surgbill

9. Facts to know
Patients can be billed for non-covered procedures, but
not for unauthorized services. Providers can process
denials of unauthorized services as a business loss
however the IRS can challenge this methodology.
Claims are adjudicated by line item (not for total
charges), which means that payers bundle and edit code
numbers for individual procedures and services (Unless
referred to third party companies for negotiation)
The patient is responsible for co-payments and
deductibles, but does not pay more than the allowed
negotiated rate.
Luis F. Aragon, RSA
Surgbill

10. No Out of Network benefits
Luis F. Aragon, RSA
Surgbill

11. Co-insurance
Luis F. Aragon, RSA
Surgbill

12. No balance billing allowed
Luis F. Aragon, RSA
Surgbill

13. Deductible
Luis F. Aragon, RSA
Surgbill

14. Co-insurance
Luis F. Aragon, RSA
Surgbill

15. To bill or not to bill! (Patients)
This has been an issue of debate nationwide in the
Surgical Assistant industry for decades now.
Facilities and surgeons want the advantage of our
services for free or for a minimal fee but do not want
their patients to be bothered with an additional bill.
We strongly recommend billing for deductibles and co-
payments, but strongly advise against balance billing or
when the plan does not have out of network benefits.
(State based)
And even deductibles and co-payments fall in the out of
network category, you have to make sure that your
surgeons and facilities know that you are engaging in this
practice.
Luis F. Aragon, RSA
Surgbill

16. AMA Council on Ethics and Judicial
Affairs
Opinion Issued: The AMA has
acknowledged that routine waivers
of coinsurance/deductibles
constitutes fraud, and proclaims the
practice to be unethical.
•http://www.ama-assn.org/ama/pub/category/4615.html
Luis F. Aragon, RSA
Surgbill

17. AMA Council on Ethics and Judicial
Affairs
• Opinion 6.12 - Forgiveness or
Waiver of Insurance Copayments:
Physicians should be aware that
forgiveness or waiver of co-payments
may violate the policies of some
insurers, both public and private…..
Routine forgiveness or waiver of co-
payments may constitute fraud under
state and federal law.
Luis F. Aragon, RSA
Surgbill

18. HIPAA Section 242
(Public Law 104-191 104 th Congress) Title II, Subtitle E
Whoever knowingly and willfully executes, or
attempts to execute, a scheme or artifice-- (1)
to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent
pretenses, representations, or promises, any
of the money or property owned by, or under
the custody or control of, any health care
benefit program, in connection with the
delivery of or payment for health care
benefits, items, or services, shall be fined
under this title or imprisoned not more than
10 years, or both.
Luis F. Aragon, RSA
Surgbill

19. Fraudulent & False
Statements
 Professional courtesy discounts in the
form of a waiver of a co-payment or
deductible constitutes both health care
fraud and false statements.
 Knowing you are required to collect a
co-pay or deductible but billing
insurance only is committing health
care fraud;
 By billing an insurance company one
charge but failing to collect the patient
co-pay or deductible, the provider is
making a false statement regarding
the charge.
Luis F. Aragon, RSA
Surgbill

20. What Does OIG Say?
In 1991 the Office of Inspector General
(OIG) issued a fraud alert concerning the
wavier of co-pays and deductibles. The
OIG stated that billing “insurance only”
may violate the False Claims Act, the
Anti-Kickback Statute, the Civil Monetary
Penalties Law, 42 U.S.C sec 1320a-7a(a)
(5), as amended by Pub.L.No 104-91 sec
231 (h), and State laws.
Luis F. Aragon, RSA
Surgbill

21. What Does OIG Say?
• Routine Waiver of Deductibles
& Coinsurance Prohibited
• 1994 Special Fraud Alert -
http://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.html
• 1991 Safe Harbor Regulations Alert –
• http://oig.hhs.gov/fraud/docs/safeharborregulations/072991.htm
Luis F. Aragon, RSA
Surgbill

22. What Does OIG Say?
• Waivers of Cost-Sharing Amounts For
Financially needy Medicare & Medicaid
Patients Permitted:
1) Waiver must not be routine;
2) Waivers may not be offered through
advertisement or solicitation;
3) Waivers may only be offered after determining
in good faith that there is a financial need or
when reasonable collection efforts have failed
•See testimony, Lewis Morris, Chief Counsel to OIG, 2004
http://oig.hhs.gov/testimony/docs/2004/40624oig.pdf
Luis F. Aragon, RSA
Surgbill

23. Best practice tip
PROVIDE AN ABN (Advanced Beneficiary Notice) during the
first visit to your surgeon ’s office:
Your doctors utilize a Surgical Assistant during some
surgeries that the hospital or your surgeon deem necessary,
this assistant is not provided by the hospital. The fee for the
assistant is 20% of the surgical charge, he/she will bill your
insurance carrier, however if your insurance does not cover
this service it will be your responsibility. In addition most
insurance plans do not contract with Surgical Assistants and
therefore this charge might be an out of network expense,
please confirm with your insurance carrier for verification.
Luis F. Aragon, RSA
Surgbill

24. Out of Network Legislation examples
• COLORADO:
West's C.R.S.A. § 10-16-704, "Network adequacy," mandates a
certain payment level for claims filed by nonparticipating medical
providers under certain specified circumstances.
Colorado Out of Network Legislation
•ILLINOIS:
1) covered services are not available from a contracted provider;
and 2) the member has made a good faith effort to use the services
of a contracted provider but such services are unavailable. In these
instances, provider/payor agreements must contain a provision
whereby the covered member will be provided a covered service at
no greater cost than if such service had been provided by a
contracted provider (50 IAC 2051.55 (e)(10)(A)).
Illinois Out of Network Legislation
Luis F. Aragon, RSA
Surgbill

25. Surgical text books, even those that deal most minutely with operative
techiques, make scant reference to the duties of the surgical assistant. And
yet the skill of the assistant is scarcely less important than the skill of the
surgeon himself. In an operation the surgeon must depend, not only upon
the experience and the caution of the anesthesiologist, but also upon the
familiarity with aseptic details, the foresight and adaptability, and the
coolness in emergency of those who aid him in the mechanical procedure
itself.
Manually, he must help in the procedure; mentally, he must himself
undertake it; he should be not be a pair of hands alone but a brain as well.
If, in the light of his greater experience, the surgeon deems unworthy of
adoption any suggestion, however sensible, that should seldom be a cause
for offense. During an operation especially, the assistant will do well to
keep his mouth closed and his eyes open. If he observes this rule, both as
a matter of decorum and as an aseptic principle, an ocassional suggestion,
introduced differentially, will be regarded with respect, - otherwise it will be
as unwelcome as it is apt to be unwise.
The Surgical Assistantl, Walter M. Brickner, B.S., M.D.,Chief of surgical department
Mount Sinai Hospital, New York City
The International Journal of Surgery; 1907

26. Questions?
Luis F. Aragon, RSA
Surgbill