Today’s post is a rant, so buckle up.

I wrote an article back in 2023 about sneaky and sudden drops in reimbursement rates for out-of-network (OON) providers. Well, it’s happening again.

This is one of the most harmful practices in our industry, one that is blindsiding and even bankrupting many therapists.

To review

Health plans are targeting clinicians who do “courtesy billing” – who submit claims for out-of-network clients, and, once the health plan pays, collect the remaining fee from the client. After months or years of full OON payment, many insurers abruptly reduce “allowed” amounts – sometimes by half – without notice to providers or clients.

What happened?

Claims were sent by the health plans to third party “repricing” companies like Zelis and Multiplan / Data iSight, which assigned new lower rates – without negotiation or consent. You can read my original story here.

What’s the update?

Three years later, this deplorable practice continues. According to company metrics, Zelis repriced between 82 – 84 million claims in 2023 alone. Multiple lawsuits against Zelis and health plans allege that these repriced rates are issued without prior negotiation or notice. In April, a federal judge ruled that Aetna, The Cigna Group, Elevance Health Companies, Humana, and UnitedHealth Group must face antitrust claims alleging they conspired with Zelis to suppress OON payments through these repricing tools.

One therapist’s experience

New York therapist Ian Laidlaw, LCSW‑R, admits he didn’t scrutinize his claim payments. Then he discovered that Cigna had been paying him sharply reduced rates for their clients – going back six months.

Cigna had sent his claims to a firm called Zelis for repricing and began paying him at the reduced Zelis rate – without notifying him or his clients.

Appeals went nowhere

Ian called Zelis and verbally rejected the discounted rate, and even formally appealed. He noted he had no contract with Cigna or Zelis allowing repricing, and that it had led to increased client financial responsibility.

His appeal was denied, with no explanation. He was told only that his rejection of the repriced fee was reported back to Cigna, and since he hadn’t negotiated a different fee with Zelis, Cigna kept the Zelis repriced fee.

Zelis told him to contact Cigna; Cigna told him to contact Zelis. Neither offered a path to resolution.

“Standard procedure”

He called Zelis again, and spoke with a supervisor. He got permission to record the call and got a written transcript using his Android phone’s “call notes” function on the phone app (go, Ian!).

But the supervisor was not helpful. She said she couldn’t advise Ian about his pricing negotiation, or even about how repricing offers should work. She did confirm that providers typically receive no advance notice of repricing. When asked how the repriced rates were calculated, she said, “I don’t know. It’s under an established reimbursement schedule that Zelis uses for out-of-network pricing.”

He was told to call Cigna if he wanted to exclude his practice from future repricing. But a Cigna rep said that it was not possible to exclude his practice from repricing since the client’s employer had included the possibility of repricing in member contracts.

What does Zelis say?

I reached out to Zelis for a comment. They immediately agreed to answer questions sent to them via email. Among other questions, I asked them to explain how repricing should work, and why advance notice was not given to providers or clients. After twice asking for extra time to respond, they said “after reviewing your questions, we have no comment.”

So, what now?

• I recommend that therapists avoid courtesy billing, since you have no contract with the company ensuring your payment will stay stable. However, Ian has decided he will now offer Cigna clients two options: Continued courtesy billing where clients are informed that repricing leaves them responsible for a larger share of the fee, or having clients pay up front and issuing superbills, an option which may save them money in the long run if Cigna reimburses at the maximum allowed amount. [Note that repricing appears far less common with member-submitted superbills, though it can still occur.]
• Ian will encourage clients to appeal previously-repriced claims themselves, as a Cigna rep indicated that member-filed appeals are typically repriced at the maximum allowed amount, while provider-filed appeals usually are not. One client is even looking into his employer policy to see if repricing is allowed.
• Ian has filed a complaint with his state’s Department of Insurance, but was advised that 1) because the plan is self-funded, it may fall under the U.S. Department of Labor’s jurisdiction, and 2) he had to also file a complaint with the Florida Department of Insurance, since one of the Cigna plans had been purchased there. He awaits word from these agencies.
• It’s a great reminder for all of us to carefully scan all Explanation of Benefits (EOBs) and claim payment reports to be sure you were paid the correct amount.

And if the health plan doesn’t pay, who will?

Ian understood that, as an out-of-network provider, he was required to collect the full amount billed to the plan. But did this now mean he had to bill the client for the portion Zelis disallowed?

The repriced Explanation of Benefits (EOB) stated, “Patient may owe more if the offer is not accepted. Call [Zelis] before billing more than patient liability shown.” What “offer” was this referring to – and did it mean Ian had to call Zelis before billing the client? A Zelis representative was unable to clarify.

What’s most alarming

The worst part? Ian did nothing wrong. Yet both Cigna and Zelis treated the sudden pay cut as routine and normal, despite years of legal challenges – and despite common sense.

In what industry would it be considered normal to cut someone’s pay in half without notice? In fact, it is typically illegal to reduce pay for hours you have already worked, and most states require “reasonable” or specific advance notice before a pay cut takes effect.

The disconnect

On the Zelis website it says that they “… prioritize transparency: Every edit or denial should be accompanied by clear, policy-based explanations that providers can understand and accept.” And under federal Transparency in Coverage (TiC) rules and the No Surprises Act, insurers must disclose the basis for repricing, including out-of-network allowed amounts. Yet the Zelis supervisor was unable to even give a basic idea of how repriced claims were calculated.

Zelis makes this statement on their website:

“We know it can be frustrating to see a claim priced by a company you’ve never worked with directly. We’re here to answer your questions, clarify our role, and help make this process as fair and transparent as possible – for you, your patient, and the payer. We support a process that promotes affordability for members, fairness for providers, and sustainability for payers.”

Yet strip away the flowery rhetoric, and the impact is clear: Repricing intermediaries like Zelis and Multiplan / Data iSight destabilize clinicians’ practices and increase client costs, creating often severe financial harm on both sides, all in the service of one goal: higher profits for health plans.