Exposing Hidden Waste: Out-of-Network Payment Schemes

By Scott Conard MD and Brian Uhlig

As a senior executive, you’re constantly focused on efficiency, transparency, and maximizing the value of your company’s investments. Healthcare benefits—often one of your organization’s largest expenditures—should be no exception. Yet, many employers unknowingly bleed money due to hidden fees and opaque out-of-network payment arrangements. If you think a polished benefits package guarantees fairness and cost control, think again.

Pulling Back the Curtain on Out-of-Network “Savings” Programs
Consider a scenario: You have 5,000 employees. Your broker partners with a major carrier that promises a cutting-edge out-of-network cost-management program. On the surface, you’re shown impressive statistics: “We saved you X%!” “Your plan saved hundreds of thousands of dollars!” But ask a crucial question: Saved compared to what? Suddenly, the narrative isn’t so clear.

One leading carrier’s program, One of the major insurance carriers offers out-of-network “payment integrity” solutions. The carrier presents data showing significant reductions in billed charges—numbers that look like heroic cost containment. Yet, behind these reported “savings,” the carrier often takes a percentage cut for themselves, effectively turning your plan’s supposed cost control measure into a revenue generator for the insurer.

Real-World Example: The 13-Hour Office Visit
Imagine a provider billing over 50 increments of a single 15-minute service in one day—implying a marathon 13.5-hour visit. Under standard Medicare rates, this service might only be worth about $32 each time. Yet the provider’s billed amount was thousands of dollars, with the plan paying only a fraction. On paper, this program would claim massive “savings.” But in reality, the carrier charged the plan a hefty percentage of that “avoided” cost—far exceeding what the doctor actually received. In one particularly egregious case, the provider was paid a mere $61 while the insurer pocketed $3,700 in “fees.”

The question executives must ask is: If the insurer knows these questionable billing practices are happening, why don’t they stop it? Quite simply, they profit from the difference.

Where the Waste Happens—and How to Fix It
This kind of wasteful spending arises when employers accept opaque arrangements without fully understanding the underlying payment mechanics. To address this problem, organizations must:

1.     Renegotiate During RFPs:
Start strong by establishing clear contract terms that prohibit the carrier from earning more than what is paid to the provider. Demand transparency and define “savings” in measurable, meaningful terms.

2.     Limit Out-of-Network Services:
Consider eliminating or tightly restricting out-of-network benefits. Handle exceptions individually to ensure members get needed care without giving carriers an open invitation to pad their margins.

3.     Engage Expert Negotiators:
Partner with advisors who understand these complex billing games. They’ll ensure plan language and fee structures minimize the potential for misaligned incentives.

Implementing these strategic approaches can reduce your per-employee per-month (PEPM) costs significantly. In fact, by addressing just one out-of-network program, some employers have seen immediate reductions of up to 7.5% of total healthcare spending.

Data-Driven Results
Employers who actively root out these hidden fees and adopt transparent payment models have achieved substantial cost reductions. Data shows that organizations employing robust payment integrity strategies and strict out-of-network controls can drive down total health plan costs by as much as 15%.

Your Next Move: Take Back Control
As an executive, every dollar counts. In a landscape where healthcare spending spirals ever upward, protecting your plan from hidden charges and self-serving “savings” schemes is critical. Don’t leave your organization’s financial health to chance.

Take the first step toward total transparency and meaningful savings. Contact us to learn more and schedule a consultation. Our team will review your existing arrangements, identify hidden waste, and help you negotiate a plan structure that truly prioritizes cost control. Stop letting opaque deals drain your resources—act now and put your company on the path to zero trend.

Written by Rob Thwaites