AHIP (America’s Health Insurance Plans), February 1, 2013
A new report from America’s Health Insurance Plans (AHIP) highlighting data collected by Dyckman & Associates shows that some physicians who choose not to participate in health insurance networks are charging patients fees that are 10 times – and in some cases, nearly 100 times – Medicare reimbursement for the same service in the same geographic area. Looking at the 30 largest states, the report found that some physicians who do not take insurance are charging patients startling fees for a wide variety of medical treatments and services.
This report demonstrates the importance of public policy leaders focusing on how much patients who seek out-of-network care are being charged by some physicians. In discussions to date, the focus only has been on how much insurers pay for these services, and the critical issue of what out-of-network physicians charge patients has been ignored.
The findings of the report should cause policymakers to closely investigate this issue, especially considering how these charges compare to in-network fees, as well as fees charged for similar services in other countries. For example, in New York, a physician billed a patient $115,625 for lumbar spinal fusion – 62 times the Medicare fee of $1,867.
While the issue of how much is appropriate for out-of-network physicians to charge has not been part of the affordability discussion to date, this report demonstrates that it needs to be. No mechanism exists to protect patients who seek care out-of-network from receiving bills that are unreasonable and unaffordable.
“As we shine a spotlight on the affordability issue, we encourage policymakers to look at how much is being charged for services, particularly since there is often no relationship between higher charges and higher quality of care,” said AHIP President and CEO Karen Ignagni. “With the nation facing the crushing burden of rising medical costs, all stakeholders should be focusing on constructive ways to bring costs under control.”
https://www.ahip.org/News/Press-Room/2013/New-Report-Examines-Physician-Out-of-Network-Charges.aspx
AHIP infographic on highest out-of-network charges:
http://www.ahipcoverage.com/wp-content/uploads/2013/01/OutOfNetwork_National_V17_FV.jpg
Comment:
By Don McCanne, M.D.
The insurance lobby organization, AHIP, is correct when they point out that patients are not protected from exorbitant fees charged by physicians outside of their own insurance networks. Although this report appropriately condemns outrageous fee gouging, the report itself is deceptive, reflecting on AHIP’s own credibility.
AHIP asked its insurers to provide the three highest billed charges from non-participating providers for each of 24 CPT procedure codes. They then took the very highest charge for 10 procedures and created a graph demonstrating how outrageous these charges were compared to Medicare rates. They distributed the graph with their press release.
Although the bar graph is quite impressive (link above), it represents only ten specific instances of fee gouging. Yet the infographic – labeled “Out-of-Network Charges” – is presented as if it were representative of charges made by out-of-network providers (though it does state that these are the highest reported out-of-network provider charges).
Nowhere in the 26 page report is there any mention of what fees were actually paid. Although the insurer pays no more than its allowed out-of-network charges, if any, does the patient pay the rest? No. Often the patients are able to negotiate payments that are closer to typical commercial insurance rates. Sometimes the patient simply doesn’t pay at all, though the claim may be turned over to a collection agency. Regardless, the AHIP report is deceptive since it represents only a few outrageous billing charges but does not represent actual typical out-of-network payments.
In this press release, AHIP implies that there needs to be a mechanism “to protect patients who seek care out-of-network from receiving bills that are unreasonable and unaffordable.” In essence, they are saying that the government should require out-of-network providers to accept rates similar to those agreed to through contracts with the in-network providers.
Think about that. The only mechanism that insurers have introduced to slow the increase in heath care spending has been provider contracting. Okay. Let’s accept their implicit recommendation. Let’s do what other industrialized nations do and use some form of government administered pricing. Then there would be no reason for the insurers to establish exclusive provider networks.
Since the insurers then would have nothing substantial to offer other than claims processing, we can do away with much of their administrative and marketing waste. In fact, we can do away with them completely by establishing our own universal health insurance administrator – a single payer national health program.
As AHIP CEO Karen Ignagni says, “With the nation facing the crushing burden of rising medical costs, all stakeholders should be focusing on constructive ways to bring costs under control.” She’s right. The first step should be to get rid of the private insurers.