Insurers' Closed Panels: Should Providers Accept or Appeal?

At times and in certain regions of the country, insurance companies can afford to be selective concerning which providers they allow, or "credential," to be in-network for their members. If an insurance company feels that it has reached an adequate number of providers for a particular specialty they will no longer issue contracts for new providers, indicating that their network is closed.

When an insurance company cites a closed panel as the reason for denying a credentialing request, providers have two options: Accept the decision and file out-of-network claims (be a “non-par” provider), or appeal the denial.

Accept the Closed Panel Decision: Oftentimes insurance companies say that the closed panel is temporary and they advise providers to reapply in 3, 6 or 12 months. However, insurers are under no obligation to open panels, and they may credential select providers while denying others.

If denied in-network status, providers may opt to see patients and submit bills to insurance companies as an out-of-network provider. While sometimes confusing and troublesome for patients, this may be the best option for providers.

How insurance companies handle out-of-network claims vary. The plan that patients have determines how much insurance companies pay for out-of-network care. Determining factors include:

  • Does the patient have a high deductible plan?

  • Does the patient have out-of-network coverage? The patient’s plan must have out-of-network coverage to avoid patient responsibility for the entire claim

  • Does the patient's plan have a separate, higher deductible for the out-of-network benefit?

  • What method does the plan use to set the “recognized” or “allowed” reimbursement amount?

The insurance company may base the allowed amount on:

  • A percentage of their current Community-based fee schedule for participating providers

  • Other types of rate schedules

Physician practices should work closely with their billing partners to determine the financial impact of the decision and how to educate patients about this billing process.

Appeal the Closed Panel Decision: Providers don’t have to take “no” for an answer. To craft a successful appeal, providers should 1.) Direct the appeal to the correct individual, and 2.) Make a compelling and fact-based case for in-network status (e.g., do you have special training or certifications not typical for your specialty that may differentiate you from your peers?)

It is critical to send the appeal package to the decision maker. Typically, the appeal should be directed to the Provider Representative for credentialing, usually assigned by county. The appeal should be both emailed and mailed return receipt requested, to document and ensure delivery. The person responsible for credentialing should always follow-up with a phone call. A copy of the appeal package may also be sent to the Regional Manager or someone else in the corporate office, if necessary.

A successful appeal package should include the following information:

  • The provider’s certifications and any special training

  • Special equipment, diagnostic tools or procedures that are offered and otherwise unavailable to patients in the provider’s coverage area

  • Evening and weekend hours, if applicable

  • Patient-to-specialist ratio for the provider’s area and any other data highlighting physician shortages for the coverage area

  • Other physicians on the panel who refer to the provider

  • A list of physicians who are not able to refer patients to the provider due to his/her out-of-network status

  • Any other facts, data and considerations to strengthen the appeal

Faced with a credentialing denial due to a closed panel, providers have options. Those responsible for credentialing—typically offered as a service of physician practice management company—should be well-versed in compiling and submitting effective closed panel appeal packages.

Tom Maher is President and CEO of Practicefirst, a privately-owned firm that has experience with closed panels and has provided medical coding, medical billing, credentialing and practice management solutions for over 50 years. To learn more, call Tom at 866-234-5017.