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Changes Announced for Small Group Out-of-Network Reimbursement

July 10, 2017

Applies to: Small Group (1 to 50 employees) Market

Effective July 1, 2017, Horizon Blue Cross Blue Shield of New Jersey updated certain 2017 small group plan designs to adopt the out-of-network (OON) fee schedule of 150 percent of Medicare’s allowance for voluntary OON claims for plans with OON benefits. Horizon BCBSNJ reviewed its 2017 small group plan offerings against market demand and updated its out-of-network (OON) fee schedule to improve its value proposition to its customers.

In 2016, the Small Employer Health Benefits (SEH) Program Board eliminated the outdated Prevailing Healthcare Charges System (PHCS) standard for allowed charges and began requiring carriers to identify the standard they use for the determination of allowed charges in the payment of voluntary OON claims. These initial changes took effect on renewals on or after January 1, 2017.

Specifically, Horizon BCBSNJ updated existing groups in impacted small group plans that:

  • Renewed between January 1, 2017, and July 1, 2017, with an OON fee schedule for voluntary OON claims of 110 percent of Medicare’s allowance. These customers uniformly received an update to 150 percent of Medicare’s allowance.
  • Are currently on 2016 plan designs with OON benefits renewing in 2017 with a plan design that also has OON benefits. These customers will see an update to 150 percent of Medicare’s allowance for their OON fee schedule for voluntary OON claims upon renewal.

These groups will be issued a rider explaining Horizon BCBSNJ’s methodology to determine the allowed amount for OON services and the effective date of the change, either July 1, 2017, or upon their 2017 renewal.

The changes apply only to those customers with a 2017 renewal for a SEH plan with voluntary OON benefits.

Excluded from this change are plans renewing under the federal Affordable Care Act transitional policy (i.e., “grandmothered” plans).

If you have questions, please contact your Horizon BCBSNJ sales executive or account manager.

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Published on: July 18, 2017, 03:03 a.m. ET
Last updated on: July 18, 2017, 03:12 a.m. ET