High out of network fees in health care, the health insurers point fingers, the NY Times explores.

High out of network fees in health care, the health insurers point fingers, the NY Times explores.

Have you ever had the experience of finding out after your surgery, that one of the doctors was not in the network and their fees in the in network facility were much higher than the insurance company allowed for? Have you ever been to a doctor who worked in a practice connected with a major health care institution, and then received a bill for a 15 minute office visit that was ridiculous because the doctor took a small skin sample or some other procedure.

From a consumers point of view, none of this makes sense because the amount of work required to do these procedures vs. the amount charged for them is indications of a value system that is out of whack. Medicare years ago studied the amount of work needed, with the costs of practice for most doctors and came out with a system they called RBRVS or the relative value system. Most overpriced specialists hated this, while other underpaid specialists such as chiropractors gained from it. At the time, insurance companies began to use the RBRVS system to adjust physician pay for what they performed. Over time, RBRVS has been either watered down or scrapped by most insurance carriers because of pressures by physician groups. Medicare, on the other hand, continues to use this system which was designed to level the fee schedule playing field.

On the other hand, going out of network for a procedure or to a facility is like the wild west, with fees that are often way out of proportion to the work done. This has forced most consumers to stay within the networks for care, however, occasionally, an out of network specialist has a better skill or reputation than what is available in the network is what the patient would prefer and since their insurance covers out of network care, they choose to use the doctor.

A NY Times article discusses this in detail because the insurance industry would like us to believe that all doctors who are out of network charge outrageous fees. While there are cases of this occurring, most doctors will charge a higher fee out of network, accept the patients insurance and then usually negotiate some of the extra cost by negotiation directly with the patient (of course, providing the patient is savvy enough to do so). The difficulty for most people is the lack of transparency of what things costs from the doctor, to his assistant to the facility and why. Most people also see hospital and doctor’s bills that are often several times what the insurance allows and then the rest is written off.

The takeaway from all of this is that as we move from a system of low co payments, to a system of higher deductible plans, and employers willing to pay some of the deductible costs, by knowing the costs up front, you as the consumer may be able to go to whomever you want whenver you want, providing the out of network costs of the provider are within reason.

Often, out of network in many plans comes with a higher yearly deductible and a higher co payment which is further designed to keep people in the network, and make the insurance company liable for less and less since they set up artificial pay barriers. To make matters worse for the consumer, they now often cap the fee to a certain percentage past medicare so your out of network costs may be even higher.

Three things you should do before going out of network.

1. Find out what the cost is for the out of network procedure and what the insurance company will pay. If the provider is effective, has a great reputation and is willing help keep your costs within reason, going out of network is a reasonable option.

2. Find out if there is any facility fee, and if it can be done in an in network provider facility. This will save you on costs.

3. Find out how much your employer will kick in toward your deductible. You may find that with a high deductible plan, since the employer is subsidizing your care, going to the provider of choice who is reasonably priced can be less expensive when you are going to someone who is more effective than the ones you do not know of who are on the approved list.

Going out of network to the right provider should be a choice that is available even though insurance carriers continue to make this more and more unaffordable. By being a smart consumer, having the cost discussion before making the appointment is the best option. Some providers, such as our chiropractic office do not charge much more than in network rates, but because the work we do is more labor intensive and highly specialised, we cannot make up the cost on volume and will refuse to compromise the quality of what we do by spending less time and cutting treatment corners. As such, we pick and choose who we will participate with based on their perceived reimbursement fairness. Many other doctors do the same, however, there are opportunists in every profession and just like you would shop down that large screen television, the price for the medical care you receive needs to be approproate for the work involved in doing the procedure.


Report Faults High Fees for Out-of-Network Care

Just over a year ago, Angel Gonzalez, 36, awoke with searing chest pain at 2 a.m. A friend drove him to the closest emergency room.

Though he was living on $18,000 a year as a graduate student, Mr. Gonzalez had good insurance and the hospital, St. Charles in Port Jefferson, N.Y., was in his network. But the surgeon who came in to remove Mr. Gonzalez’s gallbladder that Sunday night was not.

He billed Mr. Gonzalez $30,000, and an assistant billed an additional $30,000. Mr. Gonzalez’s policy covered out-of-network providers, but at a rate it considered appropriate: $2,000. “I was on the hook for more than I made in a year,” Mr. Gonzalez said.

A health insurance industry report to be released on Friday highlights the exorbitant fees charged by some doctors to out-of-network patients like Mr. Gonzalez. The report, by America’s Health Insurance Plans, or AHIP, contrasts some of the highest bills charged by non-network providers in 30 states with Medicare rates for the same services. Some of the charges, the insurers assert, are 30, 40 or nearly 100 times greater than Medicare rates.

Insurers hope to spotlight a vexing problem that they say the Affordable Care Act does little to address. “When you’re out of network, it’s a blank check,” said Karen Ignagni, president and chief executive of AHIP. “The consumer is vulnerable to ‘anything goes.’ ”

Read the entire NY times article here