Medicare Advantage Customers to see a Decrease in Out-of-Network Expenses

Starting January 1, 2016, health insurance companies who fail to maintain accurate provider directories will face up to $25,000 in penalties for each individual who has a Medicare Advantage plan and up to $100 per individual who purchased their policy on the federally run marketplace.  Too many people have been misled into believing that their doctor or hospital of choice accepts their insurance based on information provided by the insurance company.  Unfortunately, this common mistake either disrupts an individual’s access to care or results in an unexpected bill.


According to LexisNexis, a risk management company, as many as 35% of the listings in provider directories contain errors of some sort.


Some states have already started issuing their own fines for such errors.  Last month, Anthem Blue Cross was given a $250,000 fine and Blue Shield of California received a $350,000 fine after the State of California determined that more than 35% of the doctors in their respective directories had either changed locations or were not accepting the insurance plans listed by those companies.  Blue Shield of California claims that it has done the right thing, over the last two years, by paying more than $38 million of the out-of-network bills its customers received based on the incorrect information.  In many other cases, however, consumers are being stuck with the out-of-network bills after relying on outdated information. 


Under the new rule, insurance companies are required to verify the listings in their provider directories each quarter.  Adhering to this rule may be time consuming and expensive.  Fortunately, some have found ways to make it work.  For nearly three years, New Jersey insurance companies have been required to contact providers who have not filed an insurance claim in 12 months.  If the provider does not respond in 30 days, the provider is removed from the listing.  This relatively simple action has resulted in a decrease in consumer complaints.  Other companies are working on databases where the providers can update their own information.  It remains to be seen whether the insurance companies will attempt to pass on the costs of this new requirement to consumers.  Regardless, maintaining accurate provider directories will result in a savings to the consumers in the long run. 


Source: Wall Street Journal