Health Insurance: ASH

As I mentioned last week, some insurance companies have price limits for CAM reimbursement. This means that insurers will decide in advance how much a specific treatment is worth; if a provider bills above this rate, the company will only have to pay up to this “allowed amount”. If this amount is reasonable, it isn’t cause for complaint – regulating prices can be a good idea. However, some companies have limits that are well below the normal cash rate for massage.

One of the worst perpetrators of this is American Specialty Health, more commonly known as ASH. This company is an umbrella corporation that provides CAM services to a number of other insurance carriers. Working in Oregon, I deal with ASH primarily when I work with clients who have Health Net insurance. On the rare occasions that Providence insurance provides massage coverage, it’s also through ASH.

When I say “well below the normal rate”, what exactly do I mean? Let’s put a number to this pretty heavy claim: For a 60-minute massage, the “allowed amount” by ASH is $45. I don’t know any business-owning massage therapist who regularly works for such a low price.

What’s even worse is that this amount is split up between the copay and the reimbursement. The client is responsible for a $25 copay – more than 50% of the total amount. ASH gets away with paying out $20 per massage session. Massage therapists are not allowed to seek additional funds from the client to make up the cost. $45 is what you get.

Here’s something even more mind-boggling: Since ASH is just a CAM company – an “add-on” to regular insurance – it isn’t used uniformly. For example: Health Net of Oregon uses ASH for alternative care, but Health Net of Washington uses Optum (they switched several years ago). Generally speaking, clients in Oregon will have Health Net of Oregon, but if their employer happens to be based in Washington, they will have Health Net of Washington instead.

Because the reimbursements for CAM services is through these umbrella companies, not through Health Net itself, the rates differ substantially. Including copay, I receive $45 per massage for my Health Net clients through ASH. However, I receive $64 per massage for my Health Net clients through Optum. That’s a near 40% difference for something as trivial as what state an employer is located in. And that makes a huge difference to my bottom line.

I know many providers who have decided to not take ASH clients. Too much paperwork (more on that next week), too little financial gain. I choose to take ASH because I want to be available as a health care provider to as many people as I can.

I’ve had many loyal clients with ASH coverage. As with any insurance massage, only being responsible for a small copay makes a client much more likely to return, and return regularly. Likewise, I want to stay loyal to my clients. I’ve had several clients switch over to ASH from a different insurance provider due to changes in their employment. Despite the fact that I would now be earning only half of what I had previously with these clients, I would never want to penalize them for something beyond their control. If they want to have me as their LMT, I want them to be my clients.

I don’t know if this situation will change when the Affordable Care Act rolls out next year. This irritating financial circumstance isn’t just specific to massage therapists – no CAM provider gets paid very well through ASH. If someone were to make the case that CAM providers as a whole were being discriminated against, that might affect change. But I don’t know for sure.

For those of you who plan on getting credentialed and taking insurance next year, figuring out which insurance companies you want to work with will be one of your first decisions. Ask other local providers about their experiences with certain companies – how much they reimburse, how long it usually takes for a claim to be processed, how receptive they are to questions and appeals. I plan to go over this in more detail this summer, so stay tuned!

Next up, though, is more about ASH: what they define as “medical necessity”, and how they try to stop clients from using their allowed number of CAM treatments.

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Copay and Coinsurance

As I wrote about last time, part of a massage’s value depends on its financial worth – how much a massage costs the client and how much the provider earns in total for each massage. If you’re a business owner who only works with cash payments, you might not immediately realize that there’s a difference between these two items. In broad terms, this is what the client owes, and what the insurance pays.

A client can owe money in two forms:

Copay: A set dollar amount owed by a client for a service. E.g., a $20 copay for an annual check-up.

Coinsurance: A percentage of the total cost of a service owed by a client. E.g., a 20% coinsurance for any lab test.

The primary difference between these two payment types is that the latter is entirely dependent on the price of the service, while the former is not. In application, a copay is what you pay immediately following an appointment (since you already know the exact amount owed), while the coinsurance is billed later after the insurance company has provided reimbursement.

In my own practice, I treat copays and coinsurances the same. Whatever the client owes is due up front, right after the massage. I don’t have a sophisticated billing system to keep track of missed payments, and I would never want any of my clients to be on the hook for a mere $20. Instead, I figure out the insurance reimbursement amount beforehand and calculate the coinsurance from that.

Reimbursement: What the insurance company pays you.

And what amount will the insurance companies reimburse you? In an ideal world, they would reimburse us for what we billed, only withholding the copay or coinsurance owed by the client. But also in an ideal world, practitioners would never overcharge for services or pad the bill just to make more money. Needless to say, the billing and reimbursement situation is far from ideal.

LMTs use several CPT codes to bill out for massage services. Therapists can choose how much to bill for these codes, although there is a maximum amount allowed by the state (more on all that later). Insurance companies have their own price limits for CPT codes as well. If the price that an LMT bills for a massage is less than this limit, the insurance company will reimburse the therapist in full (taking into account copay or coinsurance). However, if the LMT bills for more than the maximum allowed by the company, insurance will only pay out up to this amount.

The ACA states very clearly that health insurers are allowed to establish varying reimbursement rates “based on quality or performance measures”. This sounds abstract, but it primarily just means that insurance companies will continue to set limits for CPT codes even after the new insurance rules take effect. That’s just a fact of life.

Maximum rates for massage can differ widely across insurance companies. Some have limits high enough that I have never encountered them, while others have limits well below my normal rate.

Most people wouldn’t want to work with insurance companies who don’t pay out very well, and that’s perfectly acceptable. You can choose to only work with those that offer decent reimbursement rates. However, even the insurance companies that don’t pay very well can have other benefits to your business. Next week, I’ll talk about one of those companies in more detail.