Out-of-network billing: do you charge your rate or the payer's?

Your rate. When you are out of network with a payer, your charge is your charge. The payer's out-of-network allowed amount does not set your price; it only determines how much of what the patient paid you they get back. Setting your fee to whatever the payer would allow is leaving money on the table for no reason.

The rest of this article is how the money actually moves: what you collect, what the payer does with the claim, why the reimbursement lands with the patient instead of you, and the one check to run before the first visit so nobody is surprised.

The version of this that came up recently

A practice owner in a physical therapy practice owners group was leaving Cigna's network and asked:

"Starting with Cigna to be out of network. How are offices billing the patient. Is it your cash rate? Or rate that Cigna would pay out of network?"

The consensus in the thread was one line: bill your rate, Cigna's rates are low. One reply proposed setting the price to Cigna's out-of-network allowed amount, which is the misconception this article exists to correct. You can bill your own self-pay rate while submitting the out-of-network claim directly. You do not have to set your rate based on whatever Cigna would reimburse out of network. Cigna is the example here because it was the question; the answer is the same for any commercial payer.

The money, in order

Here is how it works in our own practice. We collect our normal self-pay rate up front. Our EHR and clearinghouse submit the out-of-network claim directly to the patient's insurance. Any reimbursement goes back to the patient or gets applied toward their deductible. No more superbills.

Three things are happening there, and each one is a decision practices get wrong on their own.

• You are paid in full at the visit.Your revenue does not depend on the payer's allowed amount, the patient's deductible, or whether the claim gets paid at all.
• The claim still goes out, and you send it. The patient does not build a superbill, log into an insurance portal, or chase the payer.
• The reimbursement lands with the patient. That is by design, and it is what keeps your rate your rate.

Why the reimbursement goes to the patient, not you

The claim goes out without accepting assignment. Accepting assignment means agreeing to take the payer's allowed amount as payment in full and having the payer pay you directly. That is the in-network deal, and it is the deal you just left. A non-assigned claim tells the payer: the patient already paid the provider, send the patient whatever their out-of-network benefit covers.

So the payer's allowed amount still matters, just not to you. If your rate is $180 and Cigna's out-of-network allowed amount is $110 with 60% coinsurance after the deductible, the patient gets $66 back and you keep $180. Set your rate to $110 instead and you have given up $70 a visit to make the patient's reimbursement math cleaner. It does not make it cleaner. It makes you cheaper.

The check to run before the first visit

Verify out-of-network benefits before the patient schedules, including whether they actually have out-of-network benefits or are on an HMO like Kaiser with none, plus their deductible and coinsurance. That lets you tell them before they even schedule whether they can expect any out-of-network reimbursement, instead of finding out after they have already done several visits and submitted a superbill themselves.

This is the same benefits check an in-network practice runs, pointed at a different question. In network, you are asking what the plan pays you. Out of network, you are asking what the plan pays the patient, and whether it pays anything. The call script for verifying PT benefits covers the questions; the out-of-network version adds "does this plan have out-of-network benefits at all" to the top of the list.

What to charge for handling the claim

Submitting the claim on the patient's behalf is work, and it is work the patient would otherwise be doing badly. We charge a 5% fee for handling the claim. Usually the patient pays this, but sometimes we choose to absorb it on a case-by-case basis. Whatever you decide, decide it before the first claim, and put it in the patient's financial agreement in the same sentence as your rate.

The short version

• Out of network, bill your own self-pay rate. The payer's allowed amount determines the patient's reimbursement, not your price.
• Collect in full at the visit and submit the claim yourself, so the patient never has to build a superbill.
• Submit without accepting assignment. That is why the reimbursement goes to the patient and your rate stays yours.
• Verify out-of-network benefits before the first visit, especially whether the plan has any. HMO patients get nothing back.
• Decide what you charge for handling the claim before the first one goes out.