HSA plans do not require contracted providers to accept the health plan’s negotiated rates when members receive non-covered care. That’s what I’ve learned about the coverage policies of United/Golden Rule, Coventry, Assurant, CIGNA, Aetna, Humana and a couple of the Anthem Blues.
Quoting Hank Stern of InsureBlog, “In Ohio (and, as far as I know everywhere else), individual (as opposed to group) plans exclude normal childbirth. So someone covered under a HDHP would not get the negotiated rate for any pre-natal care…”(or the actual childbirth, or any associated expenses).
Hmmm, I wonder the rate of “complications” experienced by moms covered under HSA plans is higher than one would expect… But I digress.
The key here is what is covered, and what is not. To find that out, ask for a specific list of covered and excluded items from the broker and/or the health plan. And ask if services that are paid out of the HSA, but appear to be covered, fall under the provider’s contracted rates.
Why would you do this? Because the contracted rates are likely less than half the “retail” rate.
As to why a health plan would do this; not require their providers to accept contracted rates, that’s a mystery to me. As a couple ofcommenters have noted, if the insureds pay the higher rate, they are going to pierce their deductible layer much faster, thereby incurring claims expense and costing the health plan money. To say nothing of the consumer backlash when people find out their coverage through a national plan does not give them better rates.
I’m really surprised that health plans would do this, and do very little to educate their customers about this pervasive policy (nowhere on any website did I see this policy referenced). It makes little sense from a consumer marketing perspective, is likely to alienate customers, looks very short-sighted, and flies in the face of their touted desire to provide consumers with more education and make them better health care buyers.
Did the health plans think consumers wouldn’t figure this out? And be angry when they did?
Thanks much to Hank, my “colleague“, and several other un-named and un-nameable industry sources.
Jul
19
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I don’t see how this is an HSA, or HDHP issue. When do patients ever get plan contracted rates for non-covered services?
If you are referring to “non-covered care” as services that hit the patient’s high deductible amount (but are truely covered by the patient’s benefit structure), then that’s a different story.
The question you fail to explore and address is: Should third parties have the perogative of determining the price of services they do not purchase? Government claims the right to control prices in the national interest; but the motive for attempts at non-governmental price control must remain suspect.
Despite having little love for the health plans, it may not be a conspiracy so much as a reluctance to argue with the doctors and hospitals. Most of the providers will tell you that their agreement to discount their charge is based on an expectation of prompt payment from a solvent payer. If they have to collect from a patient’s HSA (which the patient controls), they may look upon that as a harder collection effort. Remember, also, that most HDHP’s come with a so-called HSA that is NOT funded by the employer. Funds come from the employee’s payroll deductions, if at all.
Joe,
I’ve got a cynical explanation for why health care plans don’t require providers to accept contracted rates when HSA users are under the deductible. I would suggest that there are two potential reasons: one, it is a bone that they can throw to providers to give the provider a little bit more money; two, if the contracts between the provider and the insurer call for fixed discounts off of list then they are hoping that consumers will push down the list price in order to get better prices for their entire book of business. A third explanation suddenly came to mind too… if the whole point of CDHP is that consumers shop around then there needs to be price transparency, but insurers might now want to disclose the negotiated rates sufficiently easily to enable this sort of price shopping while retail rates are “meant” to be public.
Joe, you and Hank have done a great job documenting and researching this phenomenon. I’ve been watching it closely. The only thing I can think of as to why insurers would do this is as some sort of give-back to the doctors in negotiating contracts. They pinch them hard on the reimbursement rate for normal service, but “look the other way” while allowing the docs to charge full-boat for a certain segment of the customer base. It’s actually a smart move since, if you believe that HSAs are typically being taken up by the healthy and wealthy, then that whole segment of the customer base is highly likely to be “able to pay.” In other words, no deadbeats. Hell, they might not even care that they’re paying $375 when they could get away for $140. For these kinds of folks, that might be walkin’-around money.
I considered going the HSA route this year, but figured I would let someone else test-drive the system first. I was curious as to whether the HSAs would allow me to benefit from discounted provider arrangements; I had assumed they would, but it is interesting to learn the “exceptions to the rule.” Given the amount of marketing that is being put behind these types of plans, and the efforts the government is undertaking to push “consumer-driven health care,” I think it would be great if you and the more knowledgeable people on the board can push this into the mainstream. It sounds like HSAs should be sold with a jar of vaseline….
Maybe I’m odd, but I just assumed that if something wasn’t covered by a health plan, the negotiated rates would never come into effect.
The thing is, though, I’ve found that even for things that you’d end up paying full retail for, it’s quite easy to get down close to the negotiated insurance company rates. It takes a small bit of extra effort, but I’d be shocked if you’ll find a provider that won’t give you the same deal, especially if you pay up front.