Out-of-network charges out of this world

Charges to patients receiving out-of-network care are exorbitant, according to a study by America’s Health Insurance Plans. “Health plans and their members routinely receive bills from physicians that are 10 to 20, or sometimes nearly 100 times higher than Medicare would allow,” says “Survey of Charges Billed by Out-of-Network Providers: A Hidden Threat to Affordability.” This fact, the study says, “illustrates the value of provider networks and a pressing problem faced by consumers who want affordable, meaningful access to out-of-network providers.”

AHIP argues that the Affordable Care Act does little to address this problem and undercuts the goal of cutting costs while increasing the size of the insured population. For instance, an out-of-network provider charged $12,000 for examining a tissue specimen in New York; Medicare would have paid $129.

Last August, a Managed Care cover story outlined the problem health insurers face with gouging. “Out-of-network charges from physicians are difficult for many health plans. Georganne Chapin, the president and CEO of Hudson Health Plan in Tarrytown, N.Y., received a demand for $39,000 for elective brain surgery for a sick child this spring. The story illustrates how little negotiating leverage the plan has with physicians who provide out-of-network care” (http://tinyurl.com/doc-gouging).

The survey asks AHIP member plans that operate within the 30 most populous states to provide the three highest bills in 2011 and the ZIP codes where the procedures took place for out-of-network providers.

The study argues that “Consumers see measurable savings when they visit contracted providers because in-network physicians are generally prohibited from charging patients the difference between billed charges and a negotiated rate.”

20 highest reported charges as a percentage of Medicare fee (2011)
Procedure Amount billed 2011 Medicare fee Amount billed as % of Medicare State
Subsequent hospital care $9,471 $100 9,465% Texas
Tissue exam by pathologist $12,000 $129 9,324% N.Y.
Critical care, first 30–74 minutes $27,310 $294 9,302% N.J.
Debridement of subcutaneous tissue $9,600 $105 9,167% N.Y.
Subsequent hospital care $9,800 $109 8,991% N.J.
Subsequent hospital care $10,000 $112 8,931% N.Y.
Muscle-skin graft trunk $150,500 $1,767 8,519% N.Y.
Tissue exam by pathologist $8,500 $112 7,566% Ill.
Tissue exam by pathologist $8,040 $106 7,564% Texas
Upper GI endoscopy biopsy $29,998 $409 7,331 N.Y.
Tendon sheath incision $39,450 $547 7,211% Texas
Tissue exam by pathologist $7,298 $105 6,982% Fla.
Emergency department visit $12,000 $187 6,404% N.Y.
Critical care, first 30–74 minutes $19,200 $304 6,324% N.Y.
Tissue exam by pathologist $8,100 $128 6,305% Calif.
Lumbar spine fusion $115,625 $1,867 6,194% Mo.
Tissue exam by pathologist $6,000 $103 5,798% Mo.
Emergency department visit $10,290 $182 5,661% Fla.
Tissue exam by pathologist $5,480 $100 5,460% Ken.
Debridement of subcutaneous tissue $4,740 $87 5,458% Texas

Source: “Survey of Charges Billed by Out-of-Network Providers: A Hidden Threat to Affordability,” January 2013

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HAP, a subsidiary of Henry Ford Health System, is a nonprofit health plan providing coverage to individuals, companies and organizations. This executive develops strategies to meet membership and revenue targets through products, pricing, market segmentation and advertising.  Aligns business among Business Development, Commercial Sales, Medicare and Public Sector Programs and Product Development. Seeks to enhance and be responsible for business development and expansion through the development of an effective product portfolio, strong interpersonal relationships and service excellence.

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