Give Cuomo and the Physicians What They Say They Want--Show the Patient Just What the Doc Is Accepting From Everyone Else
New York Attorney General Andrew Cuomo says that health plans are using the "Prevailing Healthcare Charges System" to "defraud" consumers and "manipulate" the system.
He points to the example of an insurer refusing to pay a physician's $200 bill--the insurer said that $77 was more appropriate.
In an earlier post, I pointed out that an examination of my own family's health insurance "explanation of benefits" statements from our insurer found a $190 office visit that was reduced to $84.17 by my insurer--which the doctor accepted as payment in full. Then there were the lab tests for my own annual physical that were reduced from the lab's charge of $478 to $63--which the lab also accepted as payment in full.
So why not give Cuomo and the docs what they say they want--a truthful and straightforward accounting of the system? Why not release to any consumer who asks for it a detailing of what their doctor is charging, and accepting, from everyone else?
What better "transparency" then seeing what your doctor is really willing to take.
The doctor with that $200 charge, to the consumer who found himself out-of-network, can then be the one doing the explaining when it becomes clear that about 90% of the time he takes more like $80 for the same thing.
There is that old saying about being careful that you don't get what you wish for.
Recent Post: The Usual and Customary Controversy--Who's Cheating Whom?
7 comments:
>So why not give Cuomo and the docs what they say they want--a truthful and straightforward accounting of the system? Why not release to any consumer who asks for it a detailing of what their doctor is charging, and accepting, from everyone else?
Apart from confidentiality terms in contracts and HIPAA, there is one other issue...
It should not list what the docs accept from everyone else but rather what buyer and seller with similar market power agree to.
So, if an insurer controls 60% of a market, find out what a healthcare vendor with 60% of market accepts from that payer.
Of course, this will be problematic buyers are far more consolidated than sellers, and this is what has led to "network" healthcare prices that are below true market price.
Of course, a doc would in theory be willing to offer the same price to an individual the instant that individual represented 60% of the market.
The problem isn't the $200. It isn't the $80. It's both.
ROBERT LASZEWSKI- “In an earlier post, I pointed out that an examination of my own family's health insurance "explanation of benefits" statements from our insurer found a $190 office visit that was reduced to $84.17 by my insurer--which the doctor accepted as payment in full. Then there were the lab tests for my own annual physical that were reduced from the lab's charge of $478 to $63--which the lab also accepted as payment in full.”
Providers “accept” PPO rates because of what the carrier is offering in order for the doc to take such a reduction in payment. Like; faster adjudication of claims, payment made directly to the provider, being in the PPO “book”, increased volume of patients….etc.
Being an out of network provider no such “incentives” exists. Therefore, why should the out of network provider take a reduction in payment?
All that aside, do you really think that PPO rates are fair market value? I think we all know that this country is on the brink of a PCP crisis in which “retail clinics” are a response to that. The sad fact is that these “incentives” that carriers use in order to get providers to take a reduction in payment is a joke. Unfortunately PCP’s are taking the brunt of it.
Usual and Customary is a scam, plain and simple. Why? 1. It’s used to “steer” patients to use in-network doctors. 2. “Usual and Customary” is described as “the charge for health care that is consistent with the AVERAGE RATE or charge for identical or similar services in a certain geographical area.” That description couldn’t be further from the truth. 3. "Prevailing Healthcare Charges System" is owned by UHC. That’s like a doctor giving a self referral.
My understanding is that Ingenix only derives about $25 million per year of revenue from selling the data in this database. That amounts to only about 2% of Ingenix' $1.3 billion of revenue and is little more than a rounding error for UnitedHealth Group which is estimated to generate $83 billion in revenue for 2008. I think United and the entire health insurance industry would be well served if they simply donated this property and the cost of maintaining it to the UnitedHealth Foundation and made the information available free to anyone who wanted to access it. That could be United's contribution to the transparency movement. If regulatory or legislative changes are needed to overcome any issues related to confidentiality agreements between providers and insurers, we should find a way to make those changes happen
Scott, the problem with your reasoning is that the physician is providing the same good for two different prices, which when looked at from an economics standpoint is just absolutely wrong. When a standard 99213 office visit costs Medicare ~$65-$70 based on GPCI rates, why is it that a provider should charge anyone more than that? They aren't spending any more time with the patient getting hit with a $200 charge off of the physician chargemaster, and there are no other services provided.
If the provider doesn't want to accept 120% or 150% of Medicare for their services, then they should do what Mr. Laszewski said in his article and turn it into an actual market for care, with a specified, transparent fee schedule available to all customers. If people will pay $200 for 15 minutes of a physician's time to affirm that they have strep throat instead of going to Minute Clinic and paying $62 for the same service, then more power to them. But at least they'll know what they are paying instead of a cloak and dagger amount in the background.
>Scott, the problem with your reasoning is that the physician is providing the same good for two different prices, which when looked at from an economics standpoint is just absolutely wrong.
Not so. One buyer is buying in bulk and the other is not.
Do nails cost the same if purchased 1 at a time or if purchased by the ton?
>When a standard 99213 office visit costs Medicare ~$65-$70
Because Medicare is buying a ton of 99213s. An individual is buying 1.
>If the provider doesn't want to accept 120% or 150% of Medicare for their services, then they should do what Mr. Laszewski said in his article and turn it into an actual market for care, with a specified, transparent fee schedule available to all customers.
I wholeheartedly agree.
This is exactly what is happening at HealthMatch.com
-“Scott, the problem with your reasoning is that the physician is providing the same good for two different prices, which when looked at from an economics standpoint is just absolutely wrong.”
No, the physician is not providing the same service for two different prices. The price is the same regardless if you’re self pay, on Medicare or have the best PPO plan money can buy.
What is wrong, are carriers having two different payment rates (PPO rates & U&C rates) for the same service.
-“When a standard 99213 office visit costs Medicare ~$65-$70 based on GPCI rates, why is it that a provider should charge anyone more than that?”
I take it your not a doctor. What a doctor charges are based on RVU’s not what Medicare allows.
-“ If the provider doesn't want to accept 120% or 150% of Medicare for their services, then they should do what Mr. Laszewski said in his article and turn it into an actual market for care, with a specified, transparent fee schedule available to all customers.”
I agree, the problem is, there is no market to turn too.
-“ If people will pay $200 for 15 minutes of a physician's time to affirm that they have strep throat instead of going to Minute Clinic and paying $62 for the same service, then more power to them.”
Well, I suspect that a couple major miss diagnosis and that will be the end of Minute Clinics.
-“ But at least they'll know what they are paying instead of a cloak and dagger amount in the background.”
Again, I agree. I’m all for transparency and I think Barry Carol had great idea “I think United and the entire health insurance industry would be well served if they simply donated this property and the cost of maintaining it to the UnitedHealth Foundation and made the information available free to anyone who wanted to access it.”
Rarely discussed in the current debate of the nation's health care crises is how academic institutions with medical schools, benefit from their involvement in billing for patients care. For example, Columbia University derives almost 33% of its revenue from their health care billing and collection practices. This equals 50% of funds from student tuition. To support this, review their most recent 2005 IRS 990 and look at the top highest paid faculty (See page 7). Without this source of revenue, Columbia's bottom line would take a substantial hit. To eliminate this inappropriate 40 year university involvement with health care financing, truly not part of their 501(c)3 mission, a number of the nation's major medical centers are removing their physicians from university payrolls as a means of improving the quality of care while controlling health care costs.
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