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

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.