Chad Terhune wrote a good article for the LA Times on excessive out-of-network charges by doctors and hospitals.
“Advanced Surgical Partners billed $87,500 as a facility fee for the 20-minute surgery that normally costs about $3,000″ per the article.
Then there was a “tissue sample” charge of $8100 when the Medicare allowable rate was $128.46. Click here to read the full article.
This is not really news. I’ve been watching those kinds of insidious and excessive out-of-network charges for decades.
The worst part is this. If your plan pays, say, 60% of out-of-network charges, you may be paying the out-of-network provider 5-10 times what you would have paid an in-network provider. Many out-of-network providers thrive on this kind of thing and know they make more profit on out-of-network patients.
Worse yet, some of the providers who are gaming the system will waive the patient’s copay and deductible. This is common.
What do you do? Here are three simple solutions:
- Scale way back on reimbursement of out-of-network providers. Pay them 60% of what the in-network allowable would have been.
- When you spot a provider doing this you can tell that provider you will no longer honor assignment but will reimburse the patient when the patient shows proof he has paid the bill in full. When I’ve done this with providers I’ve never seen a patient harmed financially.
- Do what some plans have done: Zero reimbursement for out-of-network providers. Sounds harsh? That’s how most HMO’s handle this.
Of course you can always do nothing and keep letting unethical providers rob your plan. If you choose this option you shouldn’t complain about high health care costs. BTW: Your wellness/prevention programs are, of course, utterly helpless to control this.
Tom Emerick is the President of Emerick Consulting, LLC, and Partner and Chief Strategy Officer with Laurus Strategies, a Chicago-based consulting firm, and cofounder of Edison Health. Prior to starting his consulting career, Tom was with Walmart Stores, where his last position was Vice President, Global Benefit Design, which involved designing and managing benefits for over 1.3 million employees in the U.S., and 300,000 plus in international. For about six years, Tom also headed up Walmart’s Six Sigma and process improvement initiatives. Prior to Walmart, Tom had positions with Burger King Corporation, British Petroleum, and American Fidelity Assurance Company. In 2009, Tom was named by Healthspottr as one of the top 100 innovators in healthcare the US for his work on medical ethics. In December 2012, Tom was listed in Forbes.com as one of 13 unsung heroes changing healthcare forever.