Negotiated/Contracted Rate..what does this mean?

In paying a premium to the insurance carrier, whether the lowest or the highest...one benefit that is universal is having access to the provider network of your health insurance carrier.

When services are rendered through a provider that is considered "in-network" the insured is not responsible to pay the retail cost of services.  The provider has a contract with each insurance carrier that they are deemed "in-network" with.  The contract states that the provider can only bill the insured the negotiated/contracted rate of service, which can be anywhere from 30-70% off the retail cost.  The negotiated rate is applied towards all covered expenses including prescription drugs.

When a plan has co-payments for office visits and or prescription drugs, this pre-fixed payment is to cover the negotiated rate, which may be only $20-$40 greater than the requested co-payment.

When a plan has a separate prescription drug deductible, say $500...the insured pays the negotiated rate of the medication until $500 is spent.  Once the prescription deductible is satisfied the insured will then only owe a co-payment.

So... a prospective plan that does not offer office visit or prescription copays, NO, the insured will not owe the full cost of service.  Physicians do not know the negotiated rate at time of service.  They must submit a claim to the insurance carrier to find out the allowable amount the insured can be billed.  Payment will not be due at time of service.  The insured will receive an explanation of benefits (EOB) outlining the date of service and the amount that may be owed to the provider.

For further questions on plan benefits please contact the shoppe!

Thanks,

Jordan