Understanding Tiered Networks and Plan Options

Did you know that many insurance carriers have tiered networks and multiple plan options? When working with insurance companies, it’s important to understand what your practice is signing up for and the nuances of tiered options.

What Are Tiered Networks?

Tiered networks are designed as cost-saving mechanisms for members. These networks allow carriers to maintain robust and impressive overall networks but limit the majority of members to smaller networks depending on the tier chosen. In tiered networks, patients pay a discounted out-of-pocket fee for carriers located in the top tier of the plan. These patients can opt to see a dentist in a lower tier, but the amount required out-of-pocket will increase. The difference can be small, like a $15 copay or $30 copay, or large, like no deductible instead of a $2,000 deductible.

How Tiered Networks Are Organized

Insurance carriers use a number of methods to place dentists in tiers. While there are no set standards across the board, things like quality and cost-efficiency are factored into the equation. Depending on the contract, top-tier carriers can agree to accept lower reimbursement rates from the healthcare provider with the understanding that patient volume will likely be higher due to the positioning as a top tier provider.

Ramifications of Tiers

One 2014 study examined the impact of tier rankings of physician market share. Doctors who were placed in the bottom tier had a lower market share of new patients than physicians who were in higher tiers. Furthermore, patients who had a doctor in the lowest tier were more likely to switch healthcare carriers as a result.

What Every Dentist Should Know

It’s vital that every dental practice understands their positioning within tiered networks. If you are in a lower tier for certain carriers, it might also be worth investigating whether or not contract renewal is worthwhile. It’s also important to understand your placement when negotiating reimbursement fees. If you have a preferential placement currently, it can sometimes be more difficult to negotiate for beneficial rates. However, a mid-tier placement at another network could give you leverage at the bargaining table.

Grow Your Practice with APEX Reimbursement Specialists

The experts at APEX Reimbursement Specialists can help you to explore the best insurance carrier options, tiered or non-tiered, for your continued growth and sustained success. Contact our team today by calling (410) 710-6005. We look forward to working with you to make your practice a more profitable place.