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What Is an Insurance Carve-Out?

behavioral therapy behavioral therapy

 By: Suzanne Berman, MD, FAAP & Angelo Peter Giardino, MD, PhD, FAAP 

Sometimes insurance plans subcontract a set of benefits to another plan or network. A health plan might cover a broad range of medical services like prescriptions and surgeries, but "carve out" all mental and behavioral health services to a different plan to manage.

For example, an in-network pediatrician might evaluate a child for ADHD and give him or her a flu vaccine at the same visit. If behavioral health is "carved out," the pediatrician will have to send a bill for the flu vaccine to the child's health insurance plan and a separate bill to the mental health benefits plan for the ADHD treatment.

Avoid Surprise Carve-Outs:

Many pediatricians and parents are surprised at what some health plans carve out as "mental health." Developmental delay, anxiety, temper tantrums, and even bedwetting fall under "behavioral health" carveouts in some plans. Occasionally, the main medical plan will classify a diagnosis as "behavioral health" while the behavioral health company denies the diagnosis as "medical." Similarly, reconstructive oral surgery might be classified as either medical or carved out as dental; certain eye conditions might be classified as medical or vision.

Network Carve-Outs:

State and federal laws require that health insurance networks are accessible based on the needs of a population and its geographic distribution. For example, all medical networks must have primary care physicians, hospitals, labs, and specialists within a reasonable distance of every patient in the network whenever possible. 

​What's a reasonable distance?

Due to the wide geographic and population variations across the United States, the reasonable distance definition varies by state and by service. You can check the following resources to find information specific to your state:

Pediatric Network Adequacy:

Because the needs of children are different than those of adults, networks should also have appropriate specialists for children.

  • Some plans don't distinguish between, for example, gastroenterologists and pediatric gastroenterologists. A general surgeon may be able to do some procedures on older children, but will not treat young children for surgical conditions like a pediatric surgeon.

  • A network listing for an adult neurologist might show that he or she "accepts patients under 18;" this can mean that he or she also treats 16- and 17-year-olds.

  • A children's hospital might be in network for emergencies, and be out of network for things like prescheduled MRIs and echocardiograms (ultrasounds of the heart). Even the definition of "emergencies" might need to be defined. For example, a hospital might be in-network for emergency hospital admissions, but not ER visits.  

For these reasons, be sure to confirm your child's insurance network contains in-network pediatricians, pediatric medical, behavioral health, and surgical subspecialists, children's hospitals, and other pediatric services (like speech, occupational, and physical therapists) within a reasonable distance.

Additional Information:


About Dr. Berman:  

Suzanne BermanSuzanne Berman, MD, FAAP, is co-founder and managing partner of Plateau Pediatrics, the first NCQA-certified level 3 patient centered medical home in Tennessee. She serves the American Academy of Pediatrics (AAP) in a variety of roles―including the executive committee of the Section on Administration and Practice Management and the Committee on Child Health Financing. Dr. Berman frequently contributes to AAP projects and publications regarding medical home practice transformation, rural health, coding, data mining, and policymaking. She and her husband have three sons. 

About Dr. Giardino: 

Angelo P GiardinoAngelo P. Giardino, MD, PhD, MPH, is the Wilma T. Gibson Presidential Professor and Chair of the Department of Pediatrics at the University of Utah's School of Medicine and Chief Medical Officer at Intermountain Primary Children's Hospital in Salt Lake City, Utah. He holds subspecialty certifications in Pediatrics and Child Abuse Pediatrics from the American Board of Pediatrics. He is also a Certified Physician Executive (CPE) within the American Association for Physician Leadership. He completed the Patient Safety Certificate Program from the Quality Colloquium, is certified in medical quality (CMQ) as designated by the American Board of Medical Quality and is a Distinguished Fellow of the American College of Medical Quality. Within the American Academy of Pediatrics, Dr. Giardino is a member of the Committee on Child Health Financing, the Council on Child Abuse and Neglect, and the Council on Children with Disabilities.   


Last Updated
10/11/2018
Source
Committee on Child Health Financing (Copyright © 2018 American Academy of Pediatrics)
The information contained on this Web site should not be used as a substitute for the medical care and advice of your pediatrician. There may be variations in treatment that your pediatrician may recommend based on individual facts and circumstances.
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