Lost Benajmins Award Nominee: April 2023
To help keep healthcare costs in check, most insurance benefits plans have tiered coverage. Each plan defines rates for in-network versus out-of-network non-emergency care.
This month’s Lost Benjamins Award explains how an employer would have lost nearly $100,000 from inaccurately paid claims if a comprehensive claims audit had not tested the charges’ validity.
Billed Charge vs. Maximum Charge
Billed charges are exactly as they sound – they are the dollar amount charged by a provider for a service or procedure. The maximum charge, however, is the maximum payment a health insurance plan will consider for a particular out-of-network service, based on the benefits payable agreement outlined in the plan. The maximum charge is an agreed-upon formula based on a multiple of the amount Medicare would pay for the service or supply, an analysis of amounts charged by other service providers that provide the same service or supply, or another methodology defined by the claims administrator for a plan. When plan participants voluntarily choose an out-of-network provider, they are at risk for the difference between the provider’s full billed charge and the maximum rate charge the plan will pay.
In a current audit, Healthcare Horizons tested this limitation by submitting several out-of-network claims allowed at full billed charges across a variety of claim types. An emphasis was placed on claims where there was likely voluntary use of an out-of-network provider. Three claims showed an overpayment total of more than $95,000. The administrator agreed to review all three charges to ensure none of the services were due to emergency care and determine the amount of refunded dollars due to our client.