Cost Plus Health Plan Guarantees No Balance Billing

alliednationball“We guarantee no “balance bills” to our covered members for the amount taken as a discount from your provider’s retail bill.”

Allied National, a national TPA, is marketing a self-funded reference based pricing model that guarantees no balance billing. Below is a brief explanation on Allied’s website:

Provider Freedom is a unique approach to reimbursing providers (doctors and hospitals) for their services. The most common approach today is “managed care”, usually a PPO, which has nothing to do with managing care and only addresses provider payments. Unfortunately, many PPOs don’t deliver real value or discounts to whoever is paying for the cost of medical care (meaning you, the employer, when you self-fund).

PPO discounts for services vary greatly even within the same network and often come at the price of restricting your choice of provider for your medical care.

Provider Freedom is NOT a PPO network plan. It is a cutting edge effort to pay health providers a Fair & Reasonable rate without relying on PPO contracts or limited networks of providers. This allows your employees and their dependents to see ANY provider they wish without worries about networks and penalties, while helping to keep the cost of health care services under control.

Provider Freedom determines a Fair & Reasonable reimbursement rate in two different ways. Facility bills (hospitals, surgery centers, imaging centers) are “repriced” by determining the average cost for the service from similar providers in similar geographic areas. Publicly available cost data is utilized to determine this average cost, which is then increased to allow for overhead and profit for the provider.

Efficient facilities are well rewarded by this reimbursement and inefficient facilities don’t do as well (which should be a good thing in a competitive market).

Physicians are paid based on a database that indicates what they normally receive from larger, commercial (non-governmental) health plans. Since the majority of their commercial payments come from these large plans, the Provider Freedom payment simply provides them a similar payment level.

The critical points to be aware of with Provider Freedom are:

  1. We guarantee no “balance bills” to our covered members for the amount taken as a discount from your provider’s retail bill. If the provider attempts to balance bill, Allied will step in and work with the provider to come to an acceptable solution. The covered member is NOT responsible for any balance billing for other than normal copays, deductibles and out-of-pocket costs.
  2. The net average discounts (the price paid versus the “retail” price billed by your provider) with Provider Freedom are equal to or better than almost every PPO network. This savings is obtained by getting great savings on many services, but occasionally getting no savings on a service to prevent an employee from being balanced billed for the discount taken. From a plan cost perspective, what is important is the overall savings with Provider Freedom.
  3. When a bill has to be negotiated to a greater amount than the default payment under Provider Freedom, it does cost the plan more money. The focus is on the total savings received for all bills, not what happens with any individual bill. It is this additional payment that keeps the covered member from being balanced billed because of the discount taken.
  4. These amounts are paid as an “extra contractual settlement”, and are not subject to any out of pocket (so your covered member’s benefits are always based on the Fair & Reasonable amount). However, these payments are covered expenses under the stop loss insurance coverage and do apply to any specific or aggregate claims that may arise.
  5. On a very rare occasion a provider will refuse to accept the Provider Freedom plan as a valid “insurance” plan. When a member books an appointment and provides their new insurance information the provider often is confused about a health plan that doesn’t have a PPO network name on the ID card. Typically after calling Allied customer service the providers concerns are resolved. Approximately 1 in 1000 times the provider will simply refuse to go along with the plan. Often it is their confusion on how they’re going to be paid and not wanting to deal with collecting payment from their client. While Allied does everything possible to avoid this situation, it does happen. When this situation arises the member has two choices – pay for their services directly and submit the bill to Allied for reimbursement or change providers. While rare, this does happen and can create considerable anxiety for the member involved. Contact Allied Customer Service if this happens and allow us to work with the provider to ensure they are comfortable with the health plan. The following page contains the published FAQs on Provider Freedom for