Austin Frackt at the Incidental Economist is pulling his hair out over the New York Times piece on out of network docs at in-network emergency rooms.
A number of people, especially ER docs, have taken exception to this….
The gist of their complaints seems to be that while 65% of hospitals are subcontracting to physician groups rather than employing them that’s not proof that they refuse to accept insurance. They further allege that they believe that the vast majority of those subcontracted groups are “in network”. Therefore, they claim that the likelihood of going to an in-network ED and encountering an out-of-network physician is very small….
I’m going to side mostly with the ER docs on this on the base point. Most ER docs are in-network for at least some insurance companies.
The big problem is information as emergency medicine providers are part of the PEAR provider category. Pathology, Emergency Medicine, Anesthesiology, and Radiology specialties are the PEAR specialties and they are a pain in the ass to deal with from an insurance company data managmeent perspective. The PEAR providers are “invisible” or “non-choice” providers. Patients don’t choose their pathologist, they don’t choose which doctor sees them at the ER, they don’t choose who puts them under or who reads their films. They don’t choose. On the other hand, patients choose their PCP, they choose their surgeon for elective surgery, they choose their cardiologist, they choose their hospital or urgent care clinic.
PAR specialists work behind the scenes and usually in support of chosen providers. Emergency Medicine is a little different in that they are front line providers, but once an individual is at the ER, it is the triage nurse and the air traffic controller who determines which doc sees which patient.
There are two ways to deal with the PEAR problem from a member perspective. The first is for major insurers to contract with the major PEAR provider groups at as many hospitals as possible. This is what Mayhew Insurance does where almost all ERs and other ancillary services at almost all the hospitals are either covered under the hospital contract or have a secondary contract. As you noticed, there are a couple of caveats and carve-outs. These exceptions are dealt with by the insurer paying usual and customary out of network rates to those providers and sticking the legal department on providers who then bill members for more. We can get away with this as our states of operation have reasonably consumer friendly regulators so if a doc bills $125,000 when usual and customary is $11,000, the doc is getting $11,000 or they are getting a long protracted engagement with the legal department which will reduce their net take-home to under $11,000. Other states allow for extortion under contracts of adhesion.
The second problem with PEARs is how to list them under a directory. The web directory is supposed to be a document that shows all providers that a member can choose to go to. PEARS aren’t chosen, so they fail the data requirements to be included in a directory. Adding PEARS is a simple technical tweak to most directory systems, but it is a misleading tweak in my mind as there is no guarantee that Dr. Smith who is in the directory will be at the ER when you go in with a sucking chest wound. Dr. Jones, who is not par, could be the ER doc. When I worked on the network side of the business, this was a debate we had every six to nine months as there is no good solution of showing or not showing PEAR participation.
Now I want to ask which states “allow for extortion under contracts of adhesion” so I can try to stay out of them….
Weasel word alert! Nothing says “I’m lying” like not providing numbers that would take you little effort to produce and is key to running your business.
Fortunately, the hospital group I use employs all of the doctors working at their hospitals, so I’ve never encountered this problem.
Going to the ER is often not an elective option. If you do go to a covered facility with your broken arm and wind up seeing an out of network ER doc, then I think you should not pay. I doubt that you have a duty to a clearly coerced relationship. This is odious and should be considered against public policy by the courts. Healthcare is not purely about profit maximization and should not use used car lots as their business model.
Working on the network side, I can back up Richard’s comment about this being a pain in the butt issue.
Many insurance companies will automatically cover ER docs and the other specialties as in-net if the hospital is in-net but pay at the usual and customary. As Richard points out, this becomes an issue if the docs still bill the patient for the difference between the allowed amount and the billed amount.
Some states have tried to make it a law that these doctors have to accept the U&C, but have faced tremendous pushback.
Some insurance companies have put a lot of pressure on hospitals and systems to basically make it a requirement that these groups contract with the same insurance companies that the hospital does, whcih has met with some success. The big carriers, such as the Blues and United can do it easier because their volume with the hospital is enough to use it as leverage.
I have found the biggest issue is with anesthesiologists, who are one of the highest reimbursed specialties and who don’t want to give up any of that income. Recently, the company I work for was doing a single case negotiation with a group who billed over $5,000 for an hours worth of work. Generally speaking, the standard reimbursement for that amount of time in that location would be around $250 – $400.
Yet another reason to prefer single payer or NHS.
One of the great things about Obamacare is that it has helped force the crapfest that is medical service pricing more out into the open. Tumbrels, please.
Or rather — not tumbrels but an earnest and relentless inquiry into why someone thinks placing eight stitches should earn him $4,878. That’s a pretty damn good hourly wage….
@cat: Exactly what I thought. And this part also raised my hackles: “Therefore, they claim that the likelihood of going to an in-network ED and encountering an out-of-network physician is very small…”
The likelihood of encountering a homicidal police officer is quite small as well, but every good cop should be horrified if even _one_ exists, instead of freakishly defensive. In fact, if any ‘good cop’ is more defensive about police brutality than outraged by it, then he or she is not a good cop.
Same with ER docs. If most of them are out there saying, “This is an outrage and we must put a stop to it,” then I tend to think that the article overstated the problem. If most of them say, “This is factually untrue,” then I’ll suspend all judgement altogether, because maybe the article’s just wrong. But if they’re saying, “Only a few of us financially exploit helpless people to the tune of tens of thousands of dollars–no biggie!’ it makes me wonder.
Also, didn’t the article say that the -average- ER doc is now making $50,000 more a year, or something?
Virginia must be an “extortion-friendly” state. At an emergency clinic owned by the major hospital corporation in our area, and which is in-network for our insurance, my husband briefly saw an ER physician whose practice billed us for nearly $1K for a broken toe. BCBS paid the out-of-network amount, and we were “balance billed.” Obviously it’s more lucrative for the practice to collect this silly amount of money than to accept our insurance. When I called the business office of the practice, I was told that I needed to check with my insurance company to determine if their practice was in-network. When I called BCBS, the agent I spoke to basically said, sorry, that doctor is not in our network, the same thing had just happened to her in another state, and she had a $3K bill coming to her. Our area hospital network nowhere posts who its subcontractors are, so how am I to do advance research? It’s not the same subcontractors at all of the hospitals either, nor is it always the same ones from one year to the next. I need an Excel spreadsheet to track all this. I don’t think the system was intentionally rigged to bilk us, but it has that effect and encourages those who benefit from it to keep it going.
@Tom Levenson: Assuming they get to spend 1500 hours a year doing that. If thats the only thing they get to do every week It seems a pretty fair wage.
@gussie: Given the amoral nature of the problem and how easy it is to correct I’m leaning towards they intentionally allow out of network docs to practice in their ER so they can get a cut out of the blackmail. Its like the debt collectors, sure 9/10 people never pay, but that 1/10 guy pays out 1:100 and is a huge windfall.
This isn’t just a problem with the ER because even when getting other things done, you can’t always guarantee that the radiologist who reads the scans will be in-network. Sure, you can work for 48 straight hours–like I did when trying to find out if the CAT scan of my sinuses that my ENT recommended was in-network all the way (facility, radiologist, etc.)–but that doesn’t mean you’ll find out. You also can’t be sure of finding out how much it will cost.
By the time I’d talked to my Big Insurer about 12 times, the intermediary group assigned to help me figure out costs and find an in-network provider (twice), the doctor’s office (6 times), the radiology group–that I found online because the doctor’s office had an old phone number (four times, including their Billing Office in another state), more than one imaging center (three or four of those), it was about 48 hours.
It was exhausting and NO ONE could tell me if the entire procedure–which was to take about 15 seconds to actually do–would be in or out of network. Yes, NO ONE. Nor could they tell me costs. It was maddening.
At least that was elective (to a certain extent) and not emergency, which is magnitudes worse. But even if you’re TRYING to find the answers, you can’t.
This type of thing should happen exactly zero time per year. If it happens more than that, it’s a problem.
My situation has been that HealthLink doesn’t recognize that the PEAR providers — and thanks for that insider acronym — are working at the in-network hospital or ER.
HealthLink pays them as out-of-network, then the PEAR provider bills me for the remainder. I call HealthLink, and if I am very lucky, I get a customer service rep who will understand what is going on and re-submit the bill as in-network.
However, on three occasions, I’ve had customer service reps from HealthLink try to tell me, “Sir, those are professional services charges,” as if those somehow weren’t covered.
One of my co-workers goes to the other hospital in town (Carle), and she is getting crazy bills for every doctor’s visit which they are saying are “professional service charges,” and I wonder if her insurance company isn’t pulling the same thing on her.
Richard, the reason it makes me mad is because the one function health insurance companies are supposed to provide, the reason we might pay them, is as “gatekeepers”. They’re the interface between the provider(s), the customer and the payment.
They are supposed to control costs, because it’s in their best interest not to pay outrageous claims. They are also supposed to handle the payment end for consumers.
Transparency isn’t going to fix this. People cannot do all this “let the buyer beware!” while also paying an insurance company. They won’t be able to do anything else if they have to research and parse and question each and every step in this transaction, “anything else” like have a job to pay their insurance premium.
What about this? What about if you, the insurer, get a surprise bill for 125k the provider doesn’t get paid? Not 11k. Not nothing. Wouldn’t that end the practice really quickly? The default is “zero” unless provider submits explanation on why this was necessary. Case by case basis.
I look forward to transcripts of telephone conversations between patients and their insurance companies when the latter tells the former they’re stuck with the bill because the insurance company is trying to teach those misbehaving PEAR widgets a lesson.
I just think the value that insurers supposedly add includes taking care of the payment end. We’re told “well, they’re the gatekeepers, and that’s part of what you’re paying for”. They’re not keeping this gate very secure if people are getting hit with huge bills in addition to their premiums. If they don’t do that, they’re not adding a whole lot as far as the person who purchases the policy.
@Kay: They’re middle men. They conrtact with doctors, and they contract with patients. Those contracts are very, very, very carefully constructed to shift as much risk as is legally possible onto the providers and patients. They are not there to look out for you; they are not there to make doctors more ethical, moral or anything of the sort. They exist to maximize profits.
Those who are really good at the game get to be CEOs of Mayhew Insurance, et. al., who took down an average of about eleven and a half million dollars last year in salary and benefits.
Right, I know all that, which is why I said “gatekeeper to hold down claims they have to pay”. I get that its not Because They Care. I just think they have to at least fulfill that role. It’s all we really ask of them. Operate the payment system and contract with providers.
I’m wondering if the patient can go on the offense on this by carrying a card that says effectively ” I will only agree to services from an in-network provider. If services are provided out-of-network, then the provider agrees to accept in-network prices”. I’m sure a lawyer can make that better but that is the gist.
I’ve often had a fantasy where I’m bleeding from a severe cut but loudly demanding to be seen in-network while bleeding publically over the ER floor.
BTW, ambulances are also network and out-of-network. Another case where you may not have a choice.
@griped: Texas is definitely an extortion-friendly state. I got hit with this twice (after getting hit once by a truck while riding my bike). EMS called LifeFlight, the helicopter service they usually use–the patient has no say in this, and anyway I was lying there concussed with multiple broken bones. It’s not a time when you would pull out your cellphone and look for your network’s provider or bargain for a good price. My insurance paid 85% of the “usual and customary” fee–but they get to define what that is. The bill was $12,000, they paid $5,000 and I was billed for the rest.
Afterwards, when I was recovering, my orthopedist wanted to take a couple of pins out of my leg, a minor procedure. I asked that it be done with a local anesthetic. Nonetheless, when I was in preop, the next anesthesiologist on the rotating schedule came over. I said I wanted local. He looked disgusted, and implied I would regret it. He assigned a nurse anesthetist to stay in the OR–who stood and watched as the orthopedist and I joked about how big (huge, actually) the screwdriver was that was provided to take out the pins. The anesthesiologist billed me anyway. To add insult to all of this, he was out of network. BCBS paid him the out of network fee but he kept billing for the rest, until I wrote a nasty letter to the hospital. I honestly felt this was akin to fraud, and the anesthesiologist shouldn’t have been paid a dime.
Once again Richard Mayhew is lying to you. He claims:
Actually, there are four ways, Richard. Number three involves the Department of Justice unleashing the hounds of antitrust and white collar corruption investigation on doctors and hospitals that pepetrate this kind of scam. Throw a few doctors in pound-me-in-the-ass prison for 10 years for fraud after they issue sky-hill out-of-network bills, and you’ll magically see the practice disappear.
The fourth solution is, of course, nationalized single-payer health care.
@Tom Levenson: Hey Tom, I know it’s really challenging being a writing professor, but it’s even more challenging to see 80 patients over the course of 12 hours as my average EM colleague does and being liable for ANYTHING bad that happens to any of them. The exaggerated bills being thrown around are usually outliers, like finding the one kid who gets a full ride to a private institution and saying he’s representative of all college students. Given that something like 10% of these patients pay exactly zero to the ED that sees them, and you can understand why hospitals have occasionally outrageous charges and STILL lose money on emergency services, as my hospital does.
On the other hand, I’m pleasantly surprised that Richard wrote a post that didn’t cast all doctors as blood-sucking leeches. Congratulations, maybe you’re growing a conscience.