Kay (not the front pager) asked a good question about out of area/out of network benefits:
What happens if you have an HMO or EPO and are injured/become ill while traveling? I have gone with the more expensive PPO for my employee coverage because my son lives in another state and we visit fairly often. I worry that something will happen while we are out-of-area and it will be as if we have no coverage. I really should contact the various insurers offered by my employer, but since you are here… How do HMOs and EPOs handle travelers?
There are two answers to this question. The first is the member/patient experience, and the second is the mechanics of the experience.
HMO/Point of Service/EPO won’t pay for routine out of network care. [Point of Service is very HMO-like without as much medical management built into it] For example,if you’re a diabetic, and there is an awesome endocrinologist that is out of network who you want to see for general management and care, you are SOL or at least cash out of pocket. In a PPO, the same out of network endocrinologist may see you and you’ll still be significantly cash out of pocket, but your insurance company will pay some of the listed fee.
Emergency care is different.
Primary medical insurance policies are required to pay for emergency medical care anywhere in the United States. It does not matter where an emergency room visit occurs. If you live in West Virginia and get in a cat accident in Missouri, you’ll get your emergency medical care covered.
Insurance companies will pay for the emergency care until you are either discharged from the emergency room or you are stable and safe enough to transfer to an in-network facility. For instance if you have a compound fracture of your right tibia, once you get the leg reset, a cast and crutches, you’re considered stabilized although you still need surgery. That surgery needs to occur back in your home region for it to be covered. If you have an aneurysm, the HMO/POS and EPO policies will cover the initial emergency treatment, any needed surgeries, and recovery time until you’re stable enough to get sent home. What constitutes “stable enough” to an insurance company compared to a patient or the patient’s spouse can often be a source of a nasty fight. Some companies will pay quickly, others will drag things out and make you fight for reimbursement.
Now how does this happen?
If you are insured through either a major national carrier (Wellspan, Aetna etc) or through a Blue, most likely there is an in network provider and hospital within a short distance. The big national carriers will have big national networks. That is their comparative advantage over other insurers, a seamless experience throughout the country. The local Blue will have a locally built and maintained network but there are cooperation and network sharing agreements among all of the Blues so if a Blue Cross of New Hampshire member travels to Michigan for a week, they can get in-network rates.
Smaller, regional carriers like Group Health in Washington or Harvard Pilgrim in Massachusetts or any of the other non-Blue, non-national plans use two techniques to insure national emergency coverage. There are several “repricer” and “rental network” companies that assemble regional or national networks of providers. A local insurance company will contract for access to portions of the rental regional or national network. For instance, Harvard Pilgrim in Massachusetts may contract with a rental network for access to hospitals west of the Hudson River and south of Hartford as anything north of Hartford and east of the Hudson can be covered by in-network hospitals. Group Health in Washington state may have an agreement to share a network with a California insurance company to share their California network and a seperate agreement for hospitals east of the Mississippi. So if a member goes to an out of area and out of network emergency room, the claim is submitted through a previously agreed upon pricing structure. From a claim perspective, it is quasi-in-network although the insurance comapny covering the member will almost always pay a higher than normal rate.
The second strategy for regional carriers comes into play when a member goes to a hospital that is not in any of the rental or repricer networks. At that point, the insurance company directly negoatiates on a one time basis an out of network fee with that hospital. If there are several claims in a reasonable short time frame, the negoatiation may lead to establishing an out of network contracted rate. For instance that rate going forward could be 75% of Usual and Customary or 47% of Chargemaster, or 250% of Medicare. That type of agreement reduces billable hours for the hospital and insurance company’s legal departments.
The Blues and the big national carriers also use these two strategies to provide out of area and out of network emergency coverage, but they tend to use them less often as their networks are bigger so the odds of a member going to an out of network hospital for emergency care are lower.