out of network bills

Insurance companies to blame for ‘surprise’ medical bills: state report

J Roberts

Are you paying more for healthcare even when using an in-network provider? A recent report from the Department of Financial Services in New York State found that an alarming amount of consumers are faced with a greater out-of-pocket expense as insurers and providers are shifting the cost of care to them.

Greg B. Smith / NEW YORK DAILY NEWS

Big insurance companies and some greedy doctors are to blame for the growing number of New Yorkers whacked with “surprise” medical bills, a state inquiry has found.

Department of Financial Services Superintendent Benjamin Lawsky Wednesday released the results of his probe into the unanticipated bills that are slamming consumers.

“Simply put, surprise medical bills are causing some consumers to go broke,” the report states.

The Daily News has highlighted this problem with a series of stories over the last two months. Lawsky promised to push for reforms.

“Every time I have mentioned this issue to a crowd of people, I see nodding heads,” he said. “If that’s happening, it is a huge issue.”

His agency reviewed 2,000 complaints from 2011 and surveyed the 11 big insurers and HMOs who cover 95% of the New Yorkers who have health insurance.

The review found that patients who went out of their way to make sure the non-emergency treatment they sought was covered by their plan still wound up with bills from specialists — such as assistant surgeons, anesthesiologists and radiologists — who were outside their plan.

That’s because insurers often don’t make clear who will be involved and how much it will cost, the report found.

One patient who complained to the Financial Services department made sure to go to an in-network hospital for brain surgery but wound up with a surgeon who wasn’t in his plan. The surgeon billed him $40,091 and the insurer covered only $8,386 – leaving him to cough up $31,704.

Sherry Tomasky, advocacy director of the American Cancer Society, praised the report and criticized the “undue financial burdens that are often placed on (patients) at a time when they are least able to handle it – both financially and emotionally.”

DFS quoted ridiculously complex language one insurer cited in claiming it met its disclosure requirements: “reimbursement is based on a percentile of national prevailing charge data compiled for a specific procedure and adjusted for geographic differences.”

“Unfortunately, language such as this does not provide consumers with meaningful information,” the department wrote.

The review also documented complaints that a “small but significant number” of doctors “appear to take advantage of the fact that emergency care must be delivered” by inflating bills for treatment that’s not covered.

The survey found out-of-pocket costs for out-of-network radiology or x-ray services during emergency care averaged $2,910; for anesthesiology it was $1,794.

The Health Plan Association, the lobby group representing insurers, praised the report for shining a light on excessive bills by doctors for ER care.

“These egregious practices contribute to the rising cost of health insurance for New Yorkers,” Paul F. Macielak, HPA president, said.

The report also noted that insurers have been reducing coverage for out-of-network care and making it tougher to file claims.



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Aetna sues 9 N.J. doctors for “unconscionable” fees

J Roberts

Lawsuits claim that the out-of-network physicians charged as much as $50,000 for an inpatient consultation.

By Alicia Gallegos,

American Medical News

Aetna Inc. has accused nine New Jersey doctors of charging excessive fees for out-of-network services. Four are countersuing, alleging that the insurer is guilty of fraudulent billing practices.

The lawsuits are the latest development in a debate among insurers and health care professionals over “usual, customary and reasonable” rates for out-of-network doctors.

Aetna sued the physicians between July and November 2010, claiming that they had charged “unconscionable” fees for services and threatened to balance-bill patients if not paid.

Cardiologist Benjamin Hannallah, MD, of Watchung, N.J., charged up to $48,980 for an inpatient consultation in 2009, an increase of more than $47,000 from his 2007 rate, according to one of the lawsuits. The average Medicare charge for an inpatient consultation is $358.12, according to 2010 data from the Centers for Medicare & Medicaid Services.

Cardiologist Karan Nejad, MD, of Hackensack, N.J., raised his fee for seeing critically ill hospital patients from $2,040 in 2007 to $15,000 in 2008, another lawsuit claims. The average charge for the first hour of a critical care visit is $520.76, according to CMS data.

Gynecologist-obstetrician Waleed Abdelghani, MD, of Hackensack, who assisted in two cesarean sections, allegedly charged $30,000 for each surgery, while in-network surgeons were paid about $2,000 for the same procedure, Aetna said. Standard pay for a surgeon assisting a C-section is $1,400, Aetna spokeswoman Cynthia Michener said.

“These were just outrageous bills,” she said. “We are hoping to develop some case law here that there is such a thing as an outrageous fee.”

The sued physicians treated patients at hospitals in Aetna’s network. The patients had no knowledge they were being treated by out-of-network doctors, Michener said.

Attorneys for the doctors denied Aetna’s allegations and maintained the fee rates were reasonable. Aetna has taken the charges out of context and made much of simple clerical errors, said Robert J. Conroy, attorney for Drs. Hannallah and Nejad.

“Their case is built on half-truths, innuendo and omissions of material facts,” he said.

Aetna is attempting to establish regulations on out-of-network fees through the courts because of its failure to do so legislatively, said George Frino, attorney for interventional cardiologist Deepak Srinivasan, MD, of Hackensack, one of the defendants.

“[Dr. Srinivasan] was shocked and appalled that an insurance carrier would claim fraudulent billing activities when, for years, his invoices were processed in due course, and no complaint was ever made by Aetna,” Frino said. “In our mind, this is a gross misuse and abuse of the judicial system.”

Between November 2010 and March, four physicians, including Dr. Srinivasan, countersued Aetna. They allege deceptive billing practices and racketeering, among other claims. Aetna denies the allegations and has asked a judge to dismiss the suits.

Most out-of-network physicians practice fair billing, Michener said. Only a handful take financial advantage of hospital patients, she said.

Aetna plans to review similar billing patterns in other states to identify doctors who are potentially billing excessively.

“Some doctors who used to be in-network realized they could go out-of-network and raise fees because they had a captive patient base in the hospital,” she said.

Billing system at odds

Insurers and physicians have fought in court elsewhere over acceptable UCR rates.

In 2000, the Litigation Center of the American Medical Association and State Medical Societies sued Aetna, UnitedHealth Group and several others over a database used to determine fees for out-of-network care. The Litigation Center said the system for years had been using flawed data to set the rates.

The suits triggered an investigation by Andrew Cuomo, then New York attorney general. In 2009, UnitedHealth Group reached a $350 million settlement.

As part of a separate settlement with Cuomo’s office, large health insurers operating in New York agreed to stop using the data. None of the companies that settled admitted wrongdoing. Cases against Aetna, Cigna and WellPoint are pending.

Ingenix, a subsidiary of UnitedHealth Group, which sold the database at the center of the Cuomo agreements, is now known as OptumInsight.

A database created by FAIR Health, an independent nonprofit, was launched in January. Database officials expect to send payments based on the new figures to physicians by the summer.

American Medical Association President Cecil B. Wilson, MD, said the AMA supports more transparency in the out-of-network billing system.

“The AMA does not condone excessive fees for medical care and encourages physicians and patients to discuss costs before medical services are provided,” he said.

Also named in Aetna’s lawsuits are: internist Magdy Wahba, MD, of Paterson, N.J.; neurological surgeons, David Estin, MD, Jonathan Lustgarten, MD, and Ty James Olson, MD, all of Ridgewood, N.J.; and obstetrician-gynecologist Azer Alizade, MD, of Hackensack, N.J. Aetna also listed several “John Does” in the suits to allow for more defendants if their involvement later becomes clear.

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Out-of-Network Rates

J Roberts

By ANNA WILDE MATHEWS

Wall Street Journal

Patients beware: Your out-of-pocket expense for healthcare may increase. Learn about what many large insurers are doing when it comes to paying for doctors and hospitals that are not in a plans network. It could prove to be very costly to the average consumer. All the more need to obtain and advocate who can help negotiate your medical bills

Consumers know they will have to pay out of their pockets if they use medical providers outside their insurers’ networks. But because of a little-noticed change, they may find themselves with even bigger bills than they expect.

Several major insurers are now using rates based on Medicare fees to calculate payments for out-of-network providers. Those amounts are often a lot lower than what doctors and hospitals actually charge.

The upshot: Providers may bill patients for the difference. What’s more, that bill comes on top of whatever patients owe in deductibles or co-payments.

New York entertainment attorney Mark D. Sendroff says he knew he’d get a bill when he went to an out-of-network surgeon for a shoulder operation last summer. But he was shocked when his AetnaHealthinsurance plan paid only around $1,000 of the surgeon’s approximately $30,000 charge — and part of the payment was his deductible. “It was absolutely crazy,” he says.

Mr. Sendroff thought the plan was going to pay his doctor based on a “usual and customary” rate that’s supposed to represent a typical charge for his area. Instead, the insurer pegged the doctor’s reimbursement to 110% of the fee paid by Medicare. Mr. Sendroff appealed the decision, and after he contacted the New York attorney general’s office, Aetna agreed to pay more, he says.

Aetna says some of its plans began basing out-of-network payments on Medicare rates in late 2009, and typically they pay a percentage above the government program’s fees. In New York, the company says it warned insurance brokers the new system might generate bigger out-of-pockets, and mentioned the issue in a summary for potential customers. Aetna declined to comment on Mr. Sendroff’s case, citing privacy rules, but said $30,000 was “well above the average charge” for such surgeries.

Health Care Service, the nonprofit parent of Blue Cross and Blue Shield plans in Illinois and Texas among other states, began phasing in Medicare-based fees last year. Cigna says employers are increasingly opting for plans that pay a set percentage above Medicare.

Insurers say Medicare is a reasonable basis for reimbursement. An Aetna spokeswoman says the Medicare based payments are a “more consistent way of paying and keeping the premium down.” Health Care Service says the Medicare method helps “increase transparency for providers and members.”

For patients, the safest financial path is to use insurers’ networks. When this isn’t possible, they need to do their homework before getting treatment by talking to their providers and insurers. It’s best to get billing codes for each service and run them past the health plan, says Ida Schnipper of Health Champion, a patient-advocacy firm.

Patients also should watch for unexpected out-of-network providers. For instance, an in-network hospital might have out-of-network anesthesiologists. If they do get stuck with a charge they didn’t see coming, they can appeal to the insurer and also try turning to a state regulator for help. Providers also sometimes negotiate discounts with patients.

Starting in August, consumers can turn to a new usual-and-customary medical charge database operated by Fair Health, which will be available at fairhealthconsumer.org. Currently, the site only has dental fees. The nonprofit says it expects a growing number of insurers to use its data.

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