| Rule number one when it comes to Arizona health insurance and out-of-network benefits… always stay in-network! Unless you are dealing with an extremely rare medical condition that only one or two physicians can treat, always stay in-network. Of course, extremely rare health conditions do occur from time-to-time that require services from an out-of-network provider. Health insurers have guidelines in place to handle such situations and will pay associated claims at in-network levels once approved. For all others, using an out-of-network provider when an in-network provider is available will likely lead to thousands of dollars in additional out-of-pocket expenses for the insured.
Many individuals are under the false impression that the co-insurance percentage of their policy will be applied to billed charges of an out-of-network provider. False. The co-insurance percentage is only applied to in-network allowed amount charges. Allowed amount charges are the pre-determined negotiated rate for services between the insurer and provider. The difference between in-network and out-of-network charges can be the difference between night and day. As an example, a surgeon charged $71,000 for services rendered, yet the allowed amount was $4500. Because the surgeon is out-of-network the patient is responsible for $66,500. Had the surgeon been in-network the patient would be responsible for their deductible and co-insurance applied to $4500.
Another example: Two surgeons charge the exact same amount for a surgery, say $10,000. One surgeon is in-network, the other out-of-network. For the in-network provider the allowed amount is $3000, the patient paying 20% co-insurance. For the out-of-network provider the allowed amount is the same, $3000, but the co-insurance is 50%. Remember, it doesn’t matter what the allowed amount is for the out-of-network provider because there is no contract with the provider mandating that they accept the allowed amount as payment in full. The bottom line is that the patient will pay, after deductible, $600 (20% of $3000) for the in-network $10,000 surgery and pay $8500 for the out-of-network $10,000 surgery. (The insurer pays 50% of $3000, the rest paid by insured.)
In January 2022 new legislation went into effect that offers some protection for those experiencing surprise medical billing in relation to emergency situations. There is also some protection for those that receive a bill from an out-of-network anesthesiologist present during a surgery using in-network providers.
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