New Guidance on Provider Discount Arrangements

On Nov. 15, 2016, the Virginia Bureau of Insurance published Administrative Letter 2016-09. The purpose of the letter is to provide guidance to carriers offering managed care health insurance plans that include options for non-network provider access at discounted rates through a provider discount arrangement. To begin with, a “provider discount arrangement” is a contractual arrangement between a carrier and a third-party vendor under which the carrier’s members have access to the vendor’s contracted providers for non-network benefits at discounted rates. The contract may also have a clause that prohibits the providers from balance billing.

These types of arrangements generally give members two choices with respect to non-network provider usage. First, the member may receive services from non-network providers participating in the arrangement at discounted rates. Second, members may receive services from any other non-network provider.

According to the bulletin, carriers using provider discount arrangements may not (in any of its forms or advertising materials) refer to the non-network providers as being part of a network (since that would be misleading and incorrect). Rather, policy forms, provider directories and advertising must clearly define network providers, non-network providers and non-network providers that participate in the provider discount arrangement. In addition, forms, directories and advertising must accurately describe the member’s benefits and responsibility with respect to each type of provider.

Although the bulletin is directed towards carriers, employers in Virginia should be aware of the bulletin, particularly those with carriers who offer provider discount arrangements

Administrative Letter 2016-09 »