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    Friday, April 13, 2007

    What Would You Do?: From a reader:

    I recently had a minorish orthopedic procedure...The bill was submitted to my insurance company directly from thedoctor's office and the hospital. I just got an e-mail showing that they're going to pay the hospital only $800 on the $4300 bill and the doctor only $800 on his $2400 bill. I'm supposed to pay each one roughly $200. That's a total payment of $2000 on a bill of $6700.....

    ...I realize that based on the contract with the insurance companies, the office and hospital agreed to certain reimbursement rates. However, if I had known what they were going to be paid from that invoice, I would never have agreed to let them submit it to the insurance company. I would have been more than happy to pay it out of pocket and let the insurance company reimburse me. But I realize that to pay them the idfference would likely be a violation of the terms of their contrat...

    ...I feel like I'm stealing from this doctor and the surgical center....I'm an in-house lawyer, so I make decent money. And that's probably why I feel so horrible about this situation. When I was in private practice, I never would have agreed to take such a low amount of money on that bill.

    Have doctors in Ohio formed any sort of lobbying group for the legislature or to fight the insurance companies?

    There are very few people who possess such generous feelings for their doctors' financial health. When most people see the difference between the charged fees and the reimbursement rate, they just assume the doctors are overcharging. Most hospitals and doctors, however, base their charges on some percentage of the going Medicare reimbursement rate- usually 110-140% of the Medicare rate. Sometimes, the rates can be negotiated with insurance companies - such as happens with hospitals and large groups of doctors. But for the small group practice or the solo doctor, the insurance company just tells them how much they're willing to pay them. The larger the market share held by the insurer in a given area, the lower the payment rate.

    The largest insurer in my geographic area, for example, reimburses at about 85% of Medicare rates. All other private insurers reimburse at rates above Medicare. From the doctors' perspective, telling them to take a hike would mean a substantial cut in income because it would eliminate a large number of patients from the practice. We aren't able to band together and agree to boycott these insurers. It's against the law.

    Do we have a lobbying group? Well, that's the role our professional societies have tried to fulfill. There is some reason to suspect their effectiveness. The leaders of our professional societies are often more interested in diplomacy rather than winning bargaining battles. The result is this sort of thing. We are mice fighting against lions.

    P.S. I forgot to answer the question, "What should a patient do who feels bad about the low reimbursement rate of his insurance company?" The answer- change insurance companies. But that's difficult for many to do because the patients (the actual consumers of services and insurance products) aren't the ones doing the choosing - their employers are. And that's a big part of the problem with our system. Some would argue it's the crux of the problem.

    posted by Sydney on 4/13/2007 09:53:00 PM 5 comments


    Well, let's not disregard the possibility that the doctor and the hospital agreed to the reimbursements that were made because they were part of some negotiated fee arrangement.

    I don't think these high bills necessarily show that doctors are overcharging insured patients, because the billed amounts are rarely actually collected in full - as this episode illustrates. If anyone is overcharged it might be the uninsured - who are least able to pay, but for whom doctors at least write off large chunks of their bills. Hospitals also claim to do this, I don't know if they really do.

    Anyway, how can one be certain what a "bill" even means any more, when most of the reimbursements are set according to negotiated fee agreements with third-parties such as insurance companies and the government?

    Stella Baskomb

    By Anonymous Anonymous, at 9:30 PM  

    I second the previous poster. I've seen various bills and "explanation of benefits" and why in some cases (when I had an HMO, doctor's visits) it looked like they were underpaying, in others it wasn't that clear.

    For example, I just had a bone density test. The medical group (a fairly large one) submitted a bill with two codes - one for over $500 and another for a little over $300. I don't know what these codes mean. The covered amount listed in "Explanation of benefits" was about $158 which goes toward my deductible.

    So is insurance severely underpaying or is the medical group overcharging in this case? If I google on prevailing price of DEXA scan I get $125-350. Why are there two codes and why the submitted bill is over $800?

    By Anonymous Anonymous, at 11:09 PM  

    I'm about to have major dental surgery whose total cost will run to five figures. Due to a screwup on my part, my dental coverage was zip. But part of it is a bone graft, and I found that my medical coverage will cover part of that. Hey, any number greater than zero. Before finding that out, the oral surgeon said he'd reduce his charge to me to what he would have accepted from dental insurance. He's still not getting more than he would have -- the med payment goes to a plastic surgeon, not him -- but I told my wife that if I could funnel some of the saved money to him, I would. She thinks I'm a bit off my rocker.

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