American Academy of Professional Coders (AAPC) Practice Exam

Which of the following is true about non-participating providers?

1. They must negotiate all fees with each patient

2. They are required to make payment adjustments

3. They are not bound by insurance contracts

4. They can only treat patients with prior authorization

The correct answer is: They are not bound by insurance contracts

Non-participating providers are those who do not have a contract with a specific insurance company. Because they are not bound by the terms of these insurance contracts, they have the freedom to set their own fees for services and do not have to adhere to the fee schedule established by the insurance company. This means they can bill patients directly and the patients may have to submit their claims for reimbursement rather than it being processed through the insurance directly. The other options present scenarios that do not accurately describe non-participating providers. For instance, while non-participating providers can negotiate fees with patients, it is not mandatory for them to do so with every patient. Additionally, they are not required to make payment adjustments as set forth by any contractual agreements, simply because they have chosen not to enter into those contracts. Finally, they do not face restrictions like needing prior authorization solely based on their non-participation; authorization requirements typically relate to the specific services being provided rather than the provider's status with the insurance.