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Using Preferred Providers - Municipality of Anchorage

The Plan has negotiated reduced rates with the following preferred providers within the Municipality of Anchorage: 

The Municipality of Anchorage is defined as the area between Girdwood and the Knik River bridge including the greater Anchorage bowl area.

If you use a non-PPO facility for the services listed above, you will be subject to the outpatient out-of-network penalties or the inpatient hospital out-of-network penalties except in the case of a bona fide emergency.

Physicians

You may use any physician you choose: there are no preferred provider discounts physicians within the Municipality of Anchorage.  Please inform your physician of your preferred providers and they can make arrangements for your services to be performed at a preferred provider.  If your physician's office performs lab or x-ray services in the office and the physician's office bills for those services, you may have those services performed at your physician's office without penalty.  If the physician's office contracts with a lab to perform the services or bill for those services, an out-of-network penalty will be applied.

If you use a non-PPO facility because your physician does not practice at Alaska Regional Hospital, you will still be subject to the out-of-network penalties for the inpatient and outpatient hospital services.

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Outpatient Out-of-Network Penalties

There are out-of-network penalties if you use a non-preferred provider for the services listed above.  The Plan will base your reimbursement on 50% of the covered charges or the amount the preferred provider would have charged.  In addition, the reimbursement percentage is reduced 20%.

For example, you live in Anchorage and need to have an outpatient procedure performed.  A non-preferred provider in Anchorage charges $1,680 for the procedure.  The preferred provider charges the Plan a negotiated rate of $900 for the procedure.  Let's assume that you have already met your deductible for the year and your Plan usually reimburses at 85%.

If you have scan at the preferred provider, the Plan will pay $765 ($900 X 85%).  Your out-of–pocket expense will be $135.

Your out-of-pocket expense will be $1,095 if you have the procedure performed at the non-preferred provider, and the Plan will pay $585.  First, the $1,680 expense is marked down by 50% to $840 and compared to the preferred provider rate of $900.   The preferred provider rate of $900 will be used to calculate reimbursement because it was higher than the 50% reduced price of $840.  The reimbursement rate is then reduced by 20% ($900 X 65%). 

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Inpatient Hospital Out-of-Network Penalties

There are out-of-network penalties if you use a non-preferred provider for inpatient hospital stays.  The Plan will base your reimbursement on the preferred provider rate, apply a $1,000 penalty (for each admission), and reduce your regular reimbursement rate by 20% of the first $50,000 in covered charges. 

For example, you live in Anchorage and need to have a certain inpatient procedure .  A non-preferred provider in Anchorage charges $6,000 for this type of procedure.  The preferred provider charges the Plan a negotiated rate of $3,200 for this type of procedure.  Let's assume that you have already met your deductible for the year and your Plan usually reimburses at 85%.

If you have this procedure at the preferred provider, the Plan will pay $2,720 ($2,720 X 85%).  Your out-of–pocket expense will be $480.

If you have the procedure at the non-preferred provider, the Plan will only pay $1,430.  First, the $6,000 expense is marked down to the preferred provider rate of $3,200, then the $1,000 penalty is applied, and then the reimbursement rate is reduced by 20%. ($2,200 - $1,000 X 65%)  Your out-of-pocket expense will be $4,570.

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Emergencies

If you or your dependent is faced with a life threatening emergency, you or your dependent may be transported to the nearest facility without an out-of-network penalty.  You must inform the health care providers of your preferred provider when feasible. If transported to a non-preferred provider, the patient will need to be moved to the preferred provider as soon as practical to avoid out-of-network penalties.

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