Angel Gonzalez, 36, faced huge bills after emergency gallbladder surgery, despite having good insurance coverage. “I was on the hook for more than I made in a year.”
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.
$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.’ ”
“Unless we deal with cost, we won’t have affordability,” she added. “And
unless we have affordability, we won’t have people participating” under
the Affordable Care Act.
Among the fees on the report’s list are a $6,205 outpatient office visit
to a doctor in Massachusetts for which Medicare would have paid $152; a
$12,000 bill for examining a tissue specimen in New York for which
Medicare would have paid $128; and a $48,983 surgeon’s fee for a total hip replacement
in New Jersey that Medicare would have reimbursed at $1,543. Many of
the highest billers were in New York, Texas, Florida and New Jersey.
Elisabeth R. Benjamin, co-founder of the Health Care for All New York
coalition, who is often at odds with the insurance industry, said that
“is one area we totally agree on.” She continued, “Out-of-network
billing is just out of control.”
Even when out-of-network fees are compared with average commercial
insurance reimbursements, which are usually greater than Medicare, she
said, “It’s pretty outrageous.”
Doctors say the report is skewed because it focuses on a few dozen cases
of overcharging that are not representative of their billing. In
response to the insurers’ report, the American Medical Association noted
on Thursday that a recent analysis found that doctors’ services account
for just 16 percent of health care costs.
“There are outliers in every profession, in every business,” said Dr.
Andrew Y. Kleinman, a plastic surgeon who is vice president of the
Medical Society of the State of New York.
Dr. Kleinman also noted that insurers had effectively shifted the costs
of out-of-network care onto patients by changing reimbursement formulas.
Instead of the rates commercial insurers usually pay doctors, insurers
increasingly are basing their out-of-network payments on Medicare rates,
usually far lower.
A growing number of high-end, flexible health plans offer policies that
cover outside providers at, for example, 140 percent of Medicare.
“They’re selling you an insurance product you can’t use,” Dr. Kleinman
said. “You’re buying an insurance policy where the out-of-network
benefit is worthless.”
The industry’s own report suggests that using Medicare rates as a
benchmark will lead to patients’ picking up much more of the cost for
out-of-network care, whether they carefully select a specialist or, as
in the case of Mr. Gonzalez and many others, have no choice in the
Had Mr. Gonzalez been 65 or older, Medicare would have paid only $958
for the surgery. The average commercial price is $12,292, according to FAIR Health, an independent nonprofit group that tracks information on health care costs.
But Mr. Gonzalez’s health plan, United Healthcare, determined the fee
should be $1,273, of which the company paid $838. Mr. Gonzalez filed
appeals, which were rejected. He then contacted Community Health Advocates
at the Community Service Society of New York for help, and the group’s
caseworkers negotiated with the surgeon on his behalf.
After months of wrangling, the surgeon agreed to accept a significantly reduced payment: $340.
Consumer advocates and health insurance executives are calling for
greater transparency in health care pricing, including upfront
disclosure of prices of medical procedures and services.
“The health care industry can give you an estimate, just like any other
industry,” said Carrie H. Colla, an assistant professor at the Dartmouth
Institute for Health Policy and Clinical Practice, noting that the
Dartmouth-Hitchcock Medical Center has a patient price estimator online.
“It’s just not current practice right now,” Dr. Colla said. “Sometimes a
doctor won’t even know. The patient really has to push for it.”