In the complex world of healthcare billing and insurance, understanding the nuances of "carve-outs" can be a game-changer for providers. Carve-outs refer to specific services that are managed separately by third-party administrators (TPAs) or different insurance companies, rather than being covered by the primary payer. For many healthcare providers, identifying these carve-outs can be a major challenge—leading to claim denials, lost revenue, and frustration. That's where startups like Sohar are stepping in to make a significant difference.
The main goal of carve-outs is cost savings. By outsourcing high-cost or specialized services to dedicated administrators, insurers can better control claims and reduce expenses
- Sydney Cohen, Customer Success Lead, Sohar
What Are Carve-Outs?
A carve-out is when an insurer or payer decides to delegate the management of a specific healthcare service to another entity. This could be for a variety of reasons—clinical, billing, or cost-related. One of the most common examples of a carve-out is Behavioral Health (BH) services, which are frequently managed by third-party organizations like Magellan, rather than directly by the payer itself.
The main goal of carve-outs is cost savings. By outsourcing high-cost or specialized services to dedicated administrators, insurers can better control claims and reduce expenses. Common carve-out services include behavioral health, dental, and certain medical specialties such as spinal surgery. Managed Care Organizations (MCOs) are often involved in these carve-outs, especially in the context of Medicaid and Medicare.
For example, a payer like Blue Cross Blue Shield of Texas might carve out Behavioral Health services to a company like Magellan, potentially complicating billing and network status for providers. Providers might not always be aware of these carve-outs, leading to claim denials and frustration when they aren't properly contracted with the third-party administrator.
How Sohar Helps Healthcare Providers Manage Carve-Outs
Navigating carve-outs can be a confusing process, especially when you're unsure which services are covered by the primary payer and which are handled by a carve-out entity. That's where Sohar's payer intelligence platform comes in. Sohar specializes in helping healthcare providers identify, verify, and manage insurance carve-outs during the benefits verification process, ensuring that they get paid for the services they provide.
Key Features of Sohar's Solution
- Advanced Payer Intelligence
Sohar’s proprietary payer intelligence system is designed to help healthcare providers identify carve-outs that may not be clearly indicated during the benefits verification process. By analyzing historical data from previous verifications and leveraging subject matter experts, Sohar’s system can identify whether a service will be carved out to another entity or payer. - Verification Process
When a provider submits a verification request, Sohar’s system automatically checks for any indications of carve-outs. If a carve-out is detected or suspected, the platform reaches out to confirm the patient's benefits with the primary payer or any other relevant parties. Sohar works to clarify which company is managing the benefit, ensuring providers don’t waste time submitting claims to the wrong entity. - Reducing Claim Denials
One of the most common pain points for healthcare providers is claim denials, often caused by the failure to properly identify carve-outs. Sohar helps providers avoid this issue by identifying carve-outs early in the verification process. This reduces the likelihood of claim denials, ensuring that providers are paid for the services they deliver. Without accurate carve-out information, a provider might submit a claim to the wrong payer and miss out on reimbursement simply because the service was carved out to another company that the provider isn't contracted with. - Staying Updated with Changing Payer and Benefit Structures
The insurance landscape is always evolving. Insurance plans and payers often update their benefit structures, which can include changing which services are carved out and to whom they are delegated. Sohar’s system continuously updates its payer intelligence library to keep providers informed about these changes. This ongoing optimization helps healthcare providers stay ahead of shifting carve-out arrangements and avoid revenue loss. - Network Status Management
Another challenge for providers is understanding how carve-outs affect their network status. Just because a provider is in-network with the primary payer doesn’t necessarily mean they’re also in-network with the third-party administrator handling the carve-out. Sohar’s platform can help healthcare providers determine whether they need to be contracted with a secondary payer (e.g., Magellan or Carelon) to accept services related to a carve-out. This ensures that providers are fully aware of their network status and are not caught off guard when submitting claims.
Sohar’s mission is to take on the heavy lifting for healthcare providers, helping them stay updated with changing payer structures, optimize their revenue cycle, and ultimately improve their bottom line.
The Financial Impact of Carve-Outs: Talkiatry Case Study
For healthcare providers, improperly managing carve-outs can result in significant financial losses. If a provider submits a claim for a service that is carved out and not properly covered by the payer, it can lead to denials and delayed reimbursements. Many clients who come to Sohar have faced this issue, especially when carve-out services are not clearly indicated in the benefits verification process.
Take Talkiatry, for example, a telehealth company that provides psychiatric services. Talkiatry faced challenges with claims denials due to carve-out services for behavioral health, which were handled by third-party administrators like Magellan. By using Sohar's platform to identify and verify carve-out services, Talkiatry was able to reduce claim denials and improve its revenue cycle management. This case is just one example of how Sohar is helping healthcare providers avoid the financial pitfalls that come with carving out critical services.
The Growing Industry of Carve-Out Management
The carve-out industry is a growing area of focus in the healthcare sector, and its complexity is only increasing. For providers, understanding carve-outs is crucial to ensuring that they don’t lose money due to missed opportunities or incorrectly processed claims. Sohar’s mission is to take on the heavy lifting for healthcare providers, helping them stay updated with changing payer structures, optimize their revenue cycle, and ultimately improve their bottom line.
By providing healthcare providers with the tools to navigate carve-outs, Sohar is playing an essential role in simplifying the insurance process and enabling providers to get paid for the full range of services they deliver—without the headache of managing multiple payer relationships.
Conclusion
For healthcare providers, insurance carve-outs can be a hidden source of revenue loss and frustration. Sohar is transforming how healthcare providers identify, verify, and manage carve-out services, ultimately saving time and money. With continuous updates to our payer intelligence library, Sohar ensures that healthcare providers stay informed and avoid costly claim denials, helping them focus on what they do best: providing high-quality care.
If you're a healthcare provider struggling with carve-outs, Sohar could be the solution you need to streamline your billing process and ensure you're getting paid for every service you provide. Reach out to us to set up a demo or learn more.
