Q: What is the surprise insurance coverage gap and how does it intersect with balanced billing? | Physicians For Fair Coverage

A: The surprise insurance gap is an exercise in cost shifting from insurers to patients. Insurance companies are narrowing their physician networks by offering physicians take-it-or-leave-it reimbursement deals that are not financially sustainable, and are forcing more and more physicians out of network (OON). Compounding the problem, insurance companies are increasingly underpaying OON charges (i.e. the surprise insurance gap), oftentimes by significant amounts, based on flawed methodologies for determining usual and customary rates. These flawed methodologies unfairly shift the burden and expense of payment for services to patients by forcing providers to balance bill, which comes as a surprise to the patient.

Another significant factor and yet another example of insurance companies shifting responsibilities to patients is that plans have increased cost-sharing amounts for in-network services in order to keep overall costs lower – a dynamic which providers have no control over. Additionally, many insurers do not calculate OON charges in their calculations of the out-of-pocket maximum that patients are responsible for – this only imposes additional, and oftentimes significant, financial burdens on patients.

Taken together, the result of insurance companies manipulating their networks and balance billing issues has resulted in hundreds of millions of dollars per year that had been previously covered by the insurance plan, which have now been transferred to patients’ responsibilities. It is simply not fair that patients, many of whom are paying higher premiums yet getting less coverage, are hit with these bills that their insurance should cover.

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