The #1 Reason Your Provider Application Will Be Rejected
By Barbara Griswold, LMFT
November 18, 2019
Every day, therapists apply to become insurance network providers, only to be rejected. But what is the most frequently given reason? It may surprise you…..
Perhaps the most frequent reason that therapists are given for the rejection of their network application is simply that “the network is full in your area.” If that’s the case, why are you getting daily calls and emails from clients with that insurance, saying they are having trouble finding an available network therapist? And why would a health plan cap the number of providers they accept? Wouldn’t you imagine, “the more network therapists, the better?”
Turns out, the opposite is the case: While there may be state laws about mandatory minimum access standards, in general it is often in the health plan’s best interest to have the smallest provider panel possible. Smaller networks mean lower administrative costs. Each provider a plan adds to a network costs the health plan money, including the cost of data entry, provider contract management, provider data management, background and credentialing checks, etc.
Further, you may have run across a “narrow network.” This is when an insurance company offers members a particular plan that offers limited provider choice compared to their larger national or regional network — sometimes only 50% of the full network choice. While clients get less provider choice, the premiums are lower, and the insurance plan saves money. And insurers say their research shows clients care more about lower premiums than wide provider choice.
How else does the plan save money with narrower networks? The plan often saves money by excluding pricier network hospitals and treatment centers, and those who treat sicker populations, negotiating sharply-discounted rates with the rest.
Some therapists suspect that the health plans have an even darker motive: The plans may also be counting on the fact that when options are limited, more clients will to go out of network — and pay out of pocket, reducing the health plan’s costs.
But narrow networks aren’t new — they have been around long before the Affordable Care Act (ACA). In fact, 23 percent of employer-sponsored health plans offered narrow networks in 2012, the year before the ACA went into effect. However, they’ve become more popular: Since insurers can no longer compete to cover the healthiest group of individuals or raise deductibles past the ACA’s limits, some have turned to narrow networks as a way to manage expenses (Broadreach Benefits, 2016) According to McKinsey & Co., 70 percent of Marketplace plans in 2014 featured a narrow network, with premiums that were 17 percent cheaper than those with wider networks. (Broadreach Benefits, 2016)
An employer may knowingly (or unknowingly) choose a narrow network plan as a low-cost employee option alongside other medical plan offerings. By narrowing networks and only signing contracts with select providers, employers can direct employees to providers in the more affordable range and reduce healthcare expenses.
What does this mean to you? Joining insurance networks may not be as simple as filling out an application form. You may need to make repeated application attempts, hoping that shifting member needs and provider attrition may open up spaces on the provider panel. You may have to “sell yourself” to the health plan to convince them why you should be added to a network they feel is “full.” Be sure to offer a cost-effective argument, arguing what you might bring to the table that is not already offered on their provider panel. For help selling yourself to an insurance company, check out my article here, and/or contact me to set up a consultation