Leased Network Arrangements & Network Sharing Agreements

The ultimate goal of an insurance company is to expand their participation by growing their networks. Two ways that this goal can be accomplished are through leased network arrangements and network sharing agreements. Leased network arrangements are made when an insurance company leases out specific networks or portions of networks to a third party insurance administrator.  A network sharing agreement takes place when two companies that independently own and manage insurance networks form a partnership to share their network participation with one another. Both of these actions expand an insurance network by extending access to a greater number of participating providers. In today’s insurance market the number of companies that have these relationships greatly outweigh the number of companies that do not. In fact, there is a very good chance your office is currently participating in an insurance network that either can be leased through other companies or can offer you access to shared insurance networks. Naturally, this can be a very confusing topic and many offices struggle to translate what these relationships mean to their business. Rest assured that we here at Five Lakes are here to help you determine how these relationship can positively influence your PPO insurance portfolio.

Leased Network Arrangements

Providers have the chance to access some insurance networks through a contract with a third party administrator. This third party administrator does not own the insurance plans or take any of the responsibility for paying claims. Instead these types of companies will lease a network or a portion of a network from an insurance company and offer participation to providers at fees that may be higher paying than a direct network contract.  Additionally, a third party administrator may also offer access to more than a one major insurance network, simplifying the network credentialing process.

Network Sharing Agreements

Some insurance companies may offer a provider access to another company’s network through a network sharing agreement. The partnership that is formed give providers access to insurance networks that are separate from the company they are contracted with, but will allow the provider the use of their contracted fee schedule for the partner network. As with leased network arrangements, the network sharing agreement relationship will allow a provider access to multiple networks with the promise of higher reimbursement, so long as the company with the highest paying contract is joined.

How do these relationships work?

Leased Network Arrangements

• Dr. Tooth signs a contract with ABC Dental, a third party administrator with higher reimbursements that offers access to many major dental networks. When Dr. Tooth treats a patient covered under a network that is leased by ABC Dental, he will be reimbursed with his ABC Dental fees.
• It is important that the doctor’s office staff still verify benefits with and submit claims to the company providing the patient’s insurance.

Network Sharing Agreements

• Dr. Furca is a contracted provider with Smile Nation, one of the leading insurance companies in the industry. Smile Nation has just formed a partnership with Bright Smiles Inc., another top insurance provider. The partnership will allow Dr. Furca to now see Bright Smiles patients under his Smile Nation contracted fees. In the past Dr. Furca did not wish to participate with the Bright Smiles Inc. network, since they offer low reimbursements to providers. This new relationship with Smile Nation is highly advantageous to Dr. Furca as he will now have access to both company’s members under his higher paying Smile Nation fees.
• It is important that the doctor’s office staff still verify benefits with and submit claims to the company providing the patient’s insurance.

It is very important to keep in mind that the relationships that insurance companies have with third party administrators and one another can change at any given point in time. Five Lakes highly recommends that an office consults with their Account Representative before moving forward with any changes to your PPO participation.