Patient Insurance Termination Letters When Doctor No Longer In-network
Insurance is a risk-sensitive industry. A practitioner may need to terminate a patient’s insurance for different reasons. It is necessary to draft a proper letter to inform about the date and motivation behind the termination of the policy. The doctor’s no longer in-network letter is terrible news for many patients. They never expect the policy to collapse on its own all of a sudden. However, the letter provides plenty of time to replace the existing policy and get health coverage.
Ending an insurance policy is a big step for insurers. However, simple planning and proactive notifications can make it easier. This blog will help you plan your letter to patients no longer accepting insurance. We will also explore the step-by-step process of terminating a patient insurance policy.
What is a Patient Insurance Termination Letter?
Insurance companies draft a doctor no longer in-network letter when terminating a patient’s insurance policy. They can release this letter due to failure in reimbursement, violation, or additional costs.
Many insurance companies even end the insurance policy for business reasons.
You must know the stringent laws and regulations if you want to terminate someone’s policy. A single compliance breach can lead to multiple fines and even legal action. But why an insurer would need to end a patient’s health insurance?
Let us explore some of the prominent reasons;
People Defaulting on Premium Payments
Every health insurance policy demands monthly or annual fees to provide coverage to the patient. The insurer can terminate the policy if the policyholder fails to pay these premiums on time.
Individuals Committing Fraud
Any misrepresentation or fraudulent claim can instantly disqualify the policyholder from the healthcare benefits. For example, many individuals hide their pre-existing condition before buying the insurance coverage. The insurer has the right to terminate such policies.
People May Violate the Terms of the Policy
Every healthcare insurance policy defines a clear set of rules and guidelines. Policyholders must respect and follow these guidelines religiously to avoid termination. Many individuals must pay more attention to these terms and use out-of-network providers, exceed benefit limits, or don’t cooperate with the insurer.
A Policyholder’s Eligibility May Change Overtime
People can lose their eligibility by failing to meet a plan’s minimum criteria. For example, they can move to a different state, get employed, or become a senior (65+). The policyholder’s employer can also edit or drop the healthcare plan.
Step By Step Process to Prepare a Doctor No Longer In-Network Letter
You also need to release out-of-network letters to patients. What are you going to do to make the process swift and smooth? Let us help you out!
Prepare for the Consequences
Every action has a consequence in any business. Terminating insurance plans will also affect your business and its clients. Determine how much revenue you would lose after the termination.
You can start by counting your weekly clients and multiplying them by the premium rate. Lastly, multiply this by four weeks. The amount will tell you how much you could lose in the first month after terminating the policy. This knowledge is vital before drafting any letter to patients no longer accepting insurance.
Don’t Get Demotivated
It is doubtful that you’ll lose all the clients from a payer. However, don’t get high hopes that you will sustain your business with these remaining individuals. The correct estimation of the worst-case scenario is necessary to maintain the budget you need.
You must calculate how many clients you’ll need to cover up for the loss. The number would be lower to stop you from getting demotivated.
Review the Policy
You can terminate an insurance policy with written notice 90 days in advance for most cases. It gives patients ample time to change their insurance and get healthcare coverage. However, you must carefully read your policy to confirm this possibility.
Determine Your Budget
Planning a budget is vital once you know how many notices to give the patient. It might be necessary to cut down on your spending for the lost client. Insurance firms with plenty of full-fee clients won’t need to plan for any changes in their budget.
Send Notice To Your Client
You can reduce your clients’ stress by informing them a few months in advance. They won’t be coming back at you if they have prior knowledge. It is fatal to resh discharges, referrals, or change client fees.
You can provide verbal and written notice to your clients about the termination. A doctor no longer in-network letter could be necessary for the job.
Prepare a Smooth Discharge
A sudden discharge can shock the patient. They will need to figure out what to do next. You will have the ethical and legal duty to refer them to another treatment facility or therapist. Proper termination requires the insurer to provide a referral wherever appropriate.
Terminate the Policy
Mention the data when you are going to terminate the policy. You will need additional time if you have various discharges or referrals. Clients often need support to go through these transitions.
Best Practices to Write a Letter to Patients No Longer Accepting Insurance
It could be a challenging task to write clear doctor no longer in network letters. You don’t want to create unnecessary confusion and stress about the situation. Try following these best practices in your patient insurance termination letter;
- Begin your letter with a precise statement to inform patients about your intentions.
- Patients must know the exact date of the termination and the reason behind it.
- Your policyholders will panic and won’t have any about the next step. You should provide alternative options for the patient to get new coverage.
- Explain the application process, costs, and benefits of available options.
- You can help the patients transfer their medical records to a new provider and provide emergency care until the termination date.
- End the out-of-network letter to patients in a courteous tone. Thank your recipients for showing trust and cooperation. You can also provide an open communication line for their questions and concerns.
Also Read: A Guide to Insurance Direct MailSample Letter to Patients No Longer Accepting Insurance
You can refer to this sample doctor no longer in-network letters. However, don’t copy word by word. Implement personalized elements instead of a generic template.
Harry and Jennifer Watson
1 Main Street
Bedrock, NJ 05696
Our records show that your family has a health insurance policy from XYZ Insurance. It is with great regret that we are terminating our contract with this insurance firm. The policy will be ending on (add a date).
(If you want to clarify the reason behind termination further, explain here)
We have decided to inform our patients’ families to ensure a smooth transition. We know it is hard to understand such notices, so please feel free to connect with our customer care department (insert phone number). We will be happy to resolve your concerns and questions.
We will no longer submit claims to XYZ on your behalf. There are some other options for you to change your coverage plan. You can also submit your paid receipts for reimbursement by XYZ.
XYZ Associates
(provide the name of the doctors instead of only the practice’s name)
How Can PostGrid Help You Send Your Out of Network Letter to Patients?
Healthcare practices have to handle multiple tasks. It is challenging to draft these letters and send them to various patients manually. There’s always some scope for error with manual methods.
An automated solution like PostGrid’s print mail API can come to the rescue to streamline your insurance termination letters. It gives unlimited sending possibilities to healthcare practices and improves the mailing process.
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