Out of Control Out of Network Charges
Few healthcare changes have been more impacted than the out of control out of network charges billed to patients. The health care reform bill known as PPACA has for the most part been insignificant in the Northeast, in particular, as many state laws have already addressed issues such as pre-existing conditions, contraception, coverage rescissions and maximum loss ratios (MLR).
Instead, the market forces are reshaping the medical field into significant insurance & provider consolidation, larger hospital groups and flattening provider reimbursements. The problem is pointed out in Out of Network Medical Costs Affecting NY State Across investigation report commissioned by Governor Cuomo recognizing the unexpected out-of-network claim problem. Officials say that this is now “an overwhelming amount of consumer complaints.” Some examples cited in the report An Unwelcome Surprise – “a neurosurgeon charged $159,000 for an emergency procedure for which Medicare would have paid only $8,493.” Another example: ” a consumer went to an in-network hospital for gallbladder surgery with a participating surgeon. The consumer was not informed that a non-participating anesthesiologist would be used, and was stuck with a $1,800 bill. Providers are not currently required to disclose before they provide services whether they are in-network.” The average out-of-network radiology bill was 33 times what Medicare pays, officials say.
To make matters worse, Health Insurers have reduced their out of network recognized charges from private industry index UCR (usual customary and reasonable) to the Medicare Index known as RBRVS ( Resource Based Relative Value Scale ). Insurers moved away from UCR after then-NYS D.A. Mario Cuomo in 2009 forced Unitedhelatcare Group (owners of Inginex) to settle $50 Million in a conflict of interest allegation. D.A. Cuomo future hopes for UCR were to that it be overseen by a non-profit entity. So much for best laid plans.
Today, 90% of SMB members have in network only benefits but the few remaining consumers are paying for eroding out of network benefits with little transparencies and necessary protection from new out of network billing practices. The NY Dept of Financial services is calling for providers in non-emergency situations to disclose whether or not all services are in-network, what out-of-network charges will be and how much insurers will cover.
Insurers such as Aetna are taking action – with lawsuits throughout the country such as Aetna sues 9 N.J. doctors for “unconscionable” fees. Another Aetna lawsuit is discussed extensively in a law blog: In New Lawsuit, Health Insurers Allege Fraud and Kickbacks Against Out-of-Network Providers Who Forgive Patients’ Financial Responsibility.
In an ominous statement” “Failure to recognize this historical out-of-network avalanche will result in shocking financial disasters, as experienced by so many hospitals in 2003″