Announcement by Oxford Regarding Changes to Out of Network Payments
Lawrence Downs, General Counsel
In a letter dated December 1, 2009, United Healthcare (Oxford Health Plan) advised physicians that “beginning January 2010 . . .the reimbursement for all services [Oxford Liberty subscribers] receive from out-of-network providers will be calculated as a percentage of Medicare instead of the charge based methodology to which you [the provider] may be accustomed”. The letter goes on to advise that the percentage is generally set at 140 percent of the published rates allowed by Medicare.
MSNJ has had several inquiries from members regarding the impact of this new policy. In New Jersey, the normal out-of network benefits do not generally apply in emergency or urgent care situations where the patient has no control over whether he or she receives services from a non-contracted physician. Moreover, in cases in which a patient requires a level of care that is not available in-network. In these cases the patient liability is limited to the amount they would pay if the service was performed by a participating physician. As a result, the insurer will need to pay the physician an amount which causes a balance bill NOT to be issued to the patient.
In addition, some regulated benefit plans (e.g. Small Employer Health policies) generally provide for a level of out-of-network benefit that is greater than 140% of Medicare and not tied to Medicare rates.
Therefore the new limitation on reimbursements for out-of-network physician services will probably only be applicable to outpatient care. In that instance the physician is free to exercise their right to collect the balance of the fee from the patient.
We understand that the Oxford letter has caused confusion and concern among many members. We hope this guidance will clarify the consumer protections in place under state law. If you have questions kindly contact the member resource center at 609-896-1766 ext. 299.