Out of Network Reimbursement Rates Higher than In-Network in NY

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Does anyone understand why health insurers pay out-of-network providers way more than in-network providers in NY?

I have a plan with United through my employer and see a few out of network professionals on the advice of my doctors. I’m astonished at how much out of network doctors bill and how much United agrees to pay.

My understanding was that if you go out of network, the insurance will first adjust the rate to match a standard fee scale and then apply the employee cost share. So if a PT bills $600 but they normally only cover $200 for that service and your cost share is 10% then the insurance would pay $180 and you would be responsible for the rest. Instead I see my plan paying $350 for a single 40 minute PT appointment.

Am I misunderstanding how out of network coverage works? Why would insurers approve these large reimbursements that seem to violate their own stated policies?

This link confirms that United pays out at higher rates for out of network care: https://www.osc.state.ny.us/state-agencies/audits/2020/04/01/analysis-reasonable-and-customary-out-network-reimbursement-rates-medicalsurgical-services

submitted by /u/dreamdancer18
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Does anyone understand why health insurers pay out-of-network providers way more than in-network providers in NY? I have a plan with United through my employer and see a few out of network professionals on the advice of my doctors. I’m astonished at how much out of network doctors bill and how much United agrees to pay. My understanding was that if you go out of network, the insurance will first adjust the rate to match a standard fee scale and then apply the employee cost share. So if a PT bills $600 but they normally only cover $200 for that service and your cost share is 10% then the insurance would pay $180 and you would be responsible for the rest. Instead I see my plan paying $350 for a single 40 minute PT appointment. Am I misunderstanding how out of network coverage works? Why would insurers approve these large reimbursements that seem to violate their own stated policies? This link confirms that United pays out at higher rates for out of network care: https://www.osc.state.ny.us/state-agencies/audits/2020/04/01/analysis-reasonable-and-customary-out-network-reimbursement-rates-medicalsurgical-services
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