Insurers point finger at fees

Sarasota Herald-Tribune – Online

Attend any town hall meetings over healthcare lately? It should be no surprise that a hot topic of discussion is the outrageous and exorbitant medical charges by doctors and hospitals to patients. Make no mistake, doctors, hospitals and other healthcare professionals can charge any amount without any sound economic basis or rationale. On the flip side, while charges often border the absurd in terms of excessiveness, most healhcare providers are willing to negotiate.  Medical Cost Advocate can assist in reducing those charges and bringing them down to a fair and equitable level to save you money.

Maria Davis poses last month with sons Ryan and Jack, left, at home in Miller Place, N.Y. Ryan fell and received three stitches; she got a $6,000 bill. Insurers say a survey shows how medical fees are a significant part of the nation’s health care problem.NEW YORK TIMES / MAXINE HICKS

A patient in Illinois was charged $12,712 for cataract surgery. Medicare pays $675 for the same procedure. In California, a patient was charged $20,120 for a knee operation for which Medicare pays $584. And a New Jersey patient was charged $72,000 for a spinal fusion procedure that Medicare covers for $1,629.

The charges were cited in a survey sponsored by America’s Health Insurance Plans in which insurers were asked for some of the highest bills submitted to them in 2008. The group, which represents 1,300 health insurance companies, said it had no data on the frequency of such high fees, saying that to its knowledge no one had studied that question. But it said it did the survey in part to defend itself against efforts by the administration to portray certain industry practices as a major part of the nation’s health care problems.

The health insurers, saying they felt unfairly vilified, gave the report to The New York Times before posting it online today, explaining that they wanted to show that doctors’ fees are part of the health care problem.

The group said it had used Medicare payments for comparison because Medicare was so familiar and payments are, on average, about 80 percent of what private insurers pay.

“It’s the Wild, Wild West when it comes to prices of anything in the U.S. health care system, whether for a doctor visit or for hospital charges,” said Jonathan S. Skinner, a health economist at Dartmouth.

The situation is so irrational, said Uwe E. Reinhardt, an economist at Princeton, that it simply cannot go on.

“We will not emerge out of this decade with this lunacy,” Reinhardt said, adding, “You worry about credit card charges, you scream for consumer protection — why not scream for it here?”

But Dr. Robert M. Wah, a spokesman for the American Medical Association, says there is another side to the story — insurers’ low payments to doctors who enter into contracts with them and the doctors’ difficulties, in many cases, in getting paid at all. That is why, he said, doctors may simply abandon insurance plans. Then patients end up with extra fees because they have to go outside their networks.

Karen Ignagni, president and chief executive of America’s Health Insurance Plans, had a different view, saying “As we think about the health care debate, what’s been talked about is, What are the cost-sharing levels? What are the premium levels? How much do health plans pay? No politician has asked how much is being charged.”

Some of the legislation being considered by Congress would require insurers to increase their disclosure to patients of possible out-of-network costs. And President Barack Obama has proposed changing how Medicare sets its payments to doctors and hospitals. But there are no specific proposals to control prices for out-of-network medical services.

In the survey, patients were insured but saw doctors out of their networks of care providers. When patients go outside their networks, doctors have no obligation to accept the out-of-network fee from insurers as payment in full. Patients may then be accountable for the balance.

The survey looked at 10 companies that insure patients; the companies provided some of the highest bills from 2008.

State laws protecting patients from getting stuck with medical bills in excess of their normal deductibles or co-payments to providers in their insurance networks, vary widely, said Betsy M. Pelovitz, the group’s vice president for state policy. And, she said, the laws often offer little or no protection to patients who seek care outside their insurance networks.

No one intervened for Maria Davis when her son fell and hit his mouth on a floor. Davis, a respiratory therapist on Long Island, took 4-year-old Ryan to an emergency room. “He was bleeding a lot,” Davis said.

She said a doctor said he would put in a couple of stitches but seemed uncomfortable treating the agitated child. When he said he could call a plastic surgeon, Davis agreed. The surgeon, Dr. Gregory J. Diehl of Port Jefferson, “was very nice,” Davis said. He put in three stitches, and Davis assumed his bill would be fully covered by her insurer, United Healthcare. It was not. The bill was $6,000. The Davises paid their deductible of $350. After United Healthcare paid $2,024.80, Diehl reduced his bill by $2,100 and billed the Davises for the balance, $1,525.20.

He did not return calls to his office.

So far, the Davises have not paid the balance.

“I told them I thought it was an unreasonable amount,” said Jonathan Davis, Ryan’s father.

“We have gotten several letters, and they have gotten more than a little threatening,” Davis said.

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