Finger pointing ensues after survey reveals outrageous out-of-network bills
medwireNews: A stark, state-by-state overview of alarmingly steep billing by a sample of out-of-network physicians in the most populous states found doctors charging as much as 10, 20, to 100 times Medicare's going rates.
According to the trade association representing the health insurance industry that conducted the survey, America's Health Insurance Plans (AHIP), the report "illustrates the value of provider networks and a pressing problem faced by consumers who want affordable, meaningful access to out-of-network providers."
Examples of excessive charges paid to out-of-network providers include $ 34,366 for knee arthroscopy or surgery (New Jersey) when Medicare's fee is $ 718; $ 115,626 for lumbar spine fusion (New York), which is 62 times Medicare's $ 1867 fee; and $ 5520 for a brain scan (Texas) when Medicare's price tag is $ 118.
"When patients receive care out-of-network, such as during an emergency or when a physician refuses to join a network, there is no limit to what providers can charge for these services," AHIP Deputy Director and primary author Kelly Buck writes.
With assistance from healthcare consultant Dyckman & Associates LLC, AHIP assessed its member health plans in the 30 most populous states. It looked at each of the 24 Current Procedural Terminology (CPT) codes according to the three highest billed charges in 2011 and corresponding zip codes from non-participating providers. In 2011, around 88% of all claims were paid on an in-network basis while 12% were paid out-of-network.
The highest reported charge as a percent of Medicare's fee in the same locality was committed in Texas where an out-of-network provider billed $ 9471 for "subsequent hospital care" that has an applicable Medicare fee of $100 in the same locality - a 9,465% difference.
Another example that the report described as "astounding" occurred in New York where an out-of-network physician's bill for a hernia repair with a torso muscle-skin graft exceeded Medicare reimbursement by almost $ 149,000.
"Protecting consumers from runaway charges billed by some out-of-network physicians is an important policy issue at a time of major economic challenges and a national debate surrounding the affordability of health care," Buck comments.
In response to the insurer's report, the American Medical Association mentioned that doctor's services make up only 16% of healthcare costs. In that vein, Andrew Kleinman, vice president of the Medical Society of the State of New York, told the New York Times that the survey is more of a reflection of outliers while insurers share culpability by modifying reimbursement formulas that shift costs of out-of network care to patients.
By Peter Sergo, medwireNews Reporter