Health Care In The States

N.Y. Governor Raps Insurers, Health Providers For ‘Unacceptable Opaqueness’ In Billing

By Julie Appleby

March 8th, 2012, 4:31 PM

Too often patients who thought they had all the right approvals from their insurers get hit with surprise bills for out-of-network medical costs, New York Gov. Andrew Cuomo says in a report that calls on insurers, doctors and hospitals to help craft reforms.

Complaints about out-of-network costs were among the most common found in a state investigation of consumer complaints. The probe found cases in which consumers took pains to seek treatment from doctors and hospitals in their plan’s network, only to learn after they got a bill that an out-of-network surgeon or anesthesiologist had assisted in their care.  Additionally, a growing number of insurers have changed how they reimburse for out-of-network care, shifting a larger portion of the cost to policyholders. That can lead to surprises like the one faced by Sharon Smith – a Syosset, N.Y., woman whose insurer paid only $2,500 toward an $18,000 surgery on her son performed by an out-of-network provider, as KHN reported in a story last month.

Some of the bills documented in the report resulted from emergency room care, while others came from scheduled treatments, often at in-network facilities. Among the examples it cited: One consumer, who got approval for an in-network surgery, was stunned to find out that an out-of-network surgeon assisted, leaving the patient facing a $7,516 bill.    Another received an $83,000 bill from an out-of-network plastic surgeon who reattached his finger at an in-network emergency room.

“Our investigation shows that too many people are being hit with medical bills that are too high when they thought their care was covered by their insurance. We can’t allow that to continue,” Cuomo said in a press release Wednesday.

Health insurance plans vary in how they reimburse for out-of-network care. Some plans – typically HMOs – limit care to in-network providers only: the patient is responsible for all costs if they get care out of that network. Others, including preferred provider organizations, will pay part of the cost of out-of-network care, but patients are generally responsible for the difference between that payment and what their doctor or hospital charges.   After a national databank tracking usual and customary charges shut down in 2009 – following an investigation into questionable data by then-New York Attorney General Cuomo — some insurers began basing those payments on a percentage of Medicare rates.  Those rates are generally far lower than usual and customary averages, so policyholders can find themselves paying more.

Cuomo’s report calls for changes, including better disclosure by doctors or hospitals that out-of-network providers are participating in a surgery or treatment, more information from insurers about how to estimate out-of-network costs and a bar on “excessive” charges for emergency services.

A few insurers do have online “cost estimators” that allow policyholders to estimate costs from various in-network and out-of-network providers.  In addition, a nonprofit data firm in New York called Fair Health has a free online tool that allows consumers to estimate how much a dental service or medical procedure will cost in their Zip code – and how much is covered by typical insurance plans.   As early as this month, Fair Health will add an additional cost estimator to help consumers whose insurers have switched to the new Medicare-based reimbursement method to calculate their costs.

4 Responses to “N.Y. Governor Raps Insurers, Health Providers For ‘Unacceptable Opaqueness’ In Billing”

  1. Mitch says:

    I recently had surgery and spent three days in the hospital. On the first day, immediately after I woke up from the anesthesia, I looked at my chart and no less than six doctors had signed my chart. While I was sleeping! I never met one of them and didn’t recognize any of their names. A month later when I got the final bill, it showed those six names and their fees came to over $7500 in total. In my opinion, there is absolutely no better place to get ripped off than in the hospital by corrupt doctors making their rounds and dropping by your room while you are sleeping. Any of these professional shysters can drop by and see that you are sleeping and walk in and sign your chart and guess what? You are screwed! When you ask about it, they get real quiet. Even the insurance companies get real quiet. As if they are in one the scam too. Opaqueness? Don’t make me laugh! Our health care system is the most corrupt in the world! Doctors take a oath to “do no harm”? That BS! They are scam artists of the worst kind!

  2. Seref Bornovali, MD says:

    Experience from the other side of the fence:
    I see patients at hospitals and accept in-network rates. I received different explanation letters from the same private insurance company…
    One with a check at in-network rate
    One which said “we cannot pay because you are out of network ”
    One that said ” we sent the check to the patient. The doctor should bill the patient. Provider is out of network”
    The fourth one said “provider unknown”
    All same insurance company. The in-network payment and out of network refusal were about the same
    Right now I don’t know if I am in or out of network. I only guess. I tell my pat

  3. Seref Bornovali, MD says:

    Sorry; I tell my patients to call my billing office before paying if they receive a bill that shows no insurance payment, and I ask my billing office to clarify the situation with the insurance company if they receive an out of network denial.
    This costs me time and money. Accurate credentialing and prompt claim processing would solve a lot of issues.
    I do not practice in New York, but I am sure the problem is widespread.

  4. Ortho Doc says:

    Here is the problem. Insurance wants patients to pay for a plan that offers out of network benefits but they want the patients to never use it. Reason, the insurance company charges premiums that are much much higher for this benefit but try to force patients into “in-network” doctors because they reimburse at a fraction (yes a fraction) of our charges. In many cases the insurance only allows a fee to the surgeon that is less than medicare. This allows the companies to collect big premiums and pay out next to nothing. In compensation, many physicians have to see many more patients a day to make up for the low payments just to pay rent, malpractice insurance, salaries, health benefits to employees, supplies, etc…..
    This increase volume can lead to mistakes and poor service. Therefore, many doctors don’t want to work like that and choose to stay out of net work and get paid for their services what they deserve. Insurance response: scare the patient back in network. How? raise deductibles for out of netowrk care and keep premiums the same.

    The only way this will be resolved is a fee for service arrangement like every other profession has. The market will dictate what physicians can charge and what people will pay for. Insurance companies for health care should just pay a percentage of charges without all this ridiculous double speak and a patient will know exactly what they owe. For example: physician says your surgery will cost (surgeon fee) $5000. Your insurnace coverage is 75% charges therefore you will owe me $1250. That simple. No need for all the “middle men” insuarance companies hire to make claims hard to pay, not pay, etc…
    Much of your premiums go to administrative costs not benefits you use.
    Don;t feel bad for United Health whose net profits were somewhere near 4 BILLION dollars last year.