Invisible providers are providers that people can not choose directly. They tend to fall under the PEAR specialties of Pathology, Emergency Medicine, Anesthesiology, and Radiology. PEAR providers are seldom in insurance company directories because people don’t choose their pathologist, they don’t choose who treats them at the ER, and they don’t choose who knocks them out when there is a surgery. Traditionally, most PEAR providers were employees of the hospital that they worked at, and thus they were in network at in network hospitals. Their charges would be part of the overall contract package between an insurance company and the hospital.
Over the past fifteen years or so, hospitals have been outsourcing their PEAR specialties to specialty provider groups. These groups are no longer bound by the hospital’s insurance contract, and they often resist being part of an insurer’s network because the typical insurance company threat that they’ll redirect members elsewhere is a hollow threat. A Par hospital will need someone to do their pathology and the insurer can’t mandate that pathology sample be sent 10 miles away to a par facility for a fast verification that the cancer is gone.
The PEAR providers are now out of network providers that can charge anything that they want which produces provider-insurer pissing matches and big bills for patients who thought that they did everything right in finding a par surgeon, a par hospital, pre-authorized the stay, and arranged for a relative to pick them up two days after a surgery with the expectation that they would max out their in-network deductible and owe nothing else besides parking.
Instead, the patient would max out their in-network deductible as expected but then get hit with a $10,000 pathology charge, and a $27,500 anethesiology charge that the insurance company would only pick up half as those are out of network providers. This is worse for HMO and EPO plans than PPO plans as PPO plans will pay something.
California is doing something about this:
A measure that would protect Californians from so-called “surprise” doctor bills cleared the Assembly floor on a 69-1 vote Tuesday.
AB 533, authored by Rob Bonta (D-Oakland), targets situations in which consumers get care at a facility that’s in their insurance network, but also receive services from a provider who is not in their network.
Bonta’s legislation would, in such circumstances, limit the amount a patient can be charged by an out-of-network doctor to no more than the amount the patient would have paid had the physician been in network.
The PEARs will cry, but this is a good idea.
MattF
I’ve had various ‘outpatient’ surgical procedures in the past few years, and typically I get three bills– one from the outpatient facility, one from the surgeon (who is often either part-owner of the outpatient facility or part of a group practice that is a part-owner), and one from the anesthesiologist.
Elizabelle
Glad to see this. It’s an abuse, and why should the patient have to pay for the hospital outsourcing? Particularly a terrible surprise in emergency room use.
gvg
Why are they outsourcing these specialties? I assume it saves them money somehow or they are profiting by it personally.
MattF
Also, I like your medical to-do list. Although I’ve found that the surgeon generally chooses the hospital.
Auntie Anne
I agree with Elizabelle – why should patients have to pay for the hospital outsourcing? This is an especially pernicious practice with high deductible health plans.
Bruuuuce
Given all the ways in which those providers are nonconsensual and screw the patient, one might think of changing their acronym from PEAR to RAPE providers. (Not trying to trivialize rape per se; it seemed the analogy had at least some validity.)
Glad to see someone’s dealing with them. Next we go from “someone” to “everyone”.
MomSense
Oh California I’m envious of your Governor and sensible legislative ideas.
Richard Mayhew
@gvg: Better hookers and blow… or realistically, it puts the risk of a quiet week on the outsourced entity, and it keeps the employed head count down.
MomSense
I think the hospital billing employees will be very pleased with this legislation. Patients get these crazy bills from PEARs and do not realize they were billed by a separate entity (because they were treated at the hospital) and they direct their ire at the wrong people.
Zinsky
We have met the enemy – and he is us. Doctors always bitch about insurance reimbursement rates and they structure medical service delivery in the most inefficient, highest cost manner possible. They also bitch about high malpractice rates and at least 200,000 people die every year due to medical errors or negligence. Link here. Fuck ’em. The old Soviet Union had the right idea – doctors should make no more than engineers!
FlipYrWhig
What does “par” mean, starting in the second paragraph?
satby
Glad to see an attempt to curtail this because it’s abusive if not almost fraudulent.
SP
If you could charge someone who is contractually obligated to pay you (you signed saying you’d be responsible for all charges) but has no say in whether or not they agree to what you charge, why not just take everything they own? Why limit it to $28,000 for a couple hours of work? Free market, baby!
Richard mayhew
@FlipYrWhig: Par = participating in network at contracted rates.
Sorry. Insurance jargon crept through
Elizabelle
I was hit with a $600 charge for having stitches removed at a nearby Healthplex. Would have been covered if I’d returned to the hospital I was taken to, via ambulance. No one made that clear to me at the time.
Told the billing company I would have gone to a veterinarian, or taken them out myself, had I known.
RaflW
I recall the NYT did a big story about this problem a while ago. I’ve wondered if there’s any knowledge base of people resisting the massive overcharges and getting the price reduced?
Years ago I had a couple imaging sessions (MRI, CT scan). I had a mediumish-deductible insurance plan, and the two instances were at least a year apart so annual deductibles applied. The thing that shocked me was that the sticker price of each was in the $4-5K range, but then the in-network hospital ‘provider contribution’ reduced the prices to the $800 range which I paid.
I wondered how often uninsured people are even armed with the info to know to go to billing and say “F.U. for this $5,000 invoice. I’m paying $800 because I know you’ll accept that for other patients!”?
Knowing what in-network PEARs charge (if there are any left) would be very useful for going back to these rip-off artists to say “try again, bill me what’s legit.” (And yes, I understand that a contract exists – though couldn’t one argue in ER situations that the contract is a duress situation and not valid?).
RaflW
More broadly, we need this CA bill to get moving in other states. I’ll be writing my State rep and senator.
Jim
Good info. I was aware of the emergency room outsourcing, but hadn’t thought about the others. It’s interesting, too, that this happens when the “outside” physician has office and practicing space within the hospital, which would lead most people to think that the physician is part of the hospital staff.
PurpleGirl
Too early for me to read and understand — haven’t had my coffee yet. But:
When I had the hemilaminectory in 1993, HIP covered the whole deal. I never saw a bill for anything.
A few years later when I had an arthroscopic procedure on my left knee United Health Care paid the whole surgeon side of it BUT I received a bill for the pathology from the hospital, UHC claiming not to have a contract with the pathology department. I protested but paid the hospital. Then I got my check back because UHC paid the hospital pathology bill. I never understood how they could split off the pathology part — I had no part in picking the pathology.
Something similar happened when I had a fatty tumor removed at another hospital. There, UHC paid part of the pathology bill, the hospital billed me for the remainder of the bill. Then the hospital rescinded the bill to me, saying they would accept the UHC payment as payment in full.
Shakes head. All this happened after the surgeries.
GoodWomenDontNeedRules
Dear Richard ( and Balloon Juice)
I work at a very large insurance company doing call center work for our notational accounts(HRA and FSA) with my predominant customer service skill in HSAs. Two years ago the leadership decided that Financial skills trained customer service representative would go through a four week training program and then answer claims questions on Behavioral Health issues. To say it was an epic failure would be an understatement. Our training left us poorly prepared to answer questions, nor to deal with the emotional impact of dealing with mental health issues. My team had their own mental breakdown, some of would go home crying most nights, or even on our shifts. I work for a health insurance company because sadly call center work in the rust belt area is one of the few jobs that pays well, and when it comes down to food on the table and roof over my head some principles but not all wind up in the compost pile.
I saw this practice frequently while parsing out why a member received an outlandish anesthesiologist bill or pathology bill. I frequently saw this situation on claims for emergency visits during a mental health crisis. As you say Richard the member did everything right, called us (I can see all your previous calls) got a referral, had the in network hospital notify (get us to give an “authorization”) for the visit, and submitted all paperwork needed. Only to find a 1500 dollar or more physician bill because the ER doctor was not in the network at an in network hospital. At that point the only thing i could do was say Yes you owe 50% of this bill, not all providers at hospitals are In Network, even if the facility is. I would counsel that on any admit to a facility the member should instruct the staff that only In-Network providers can be used. It’s difficult to remember all that when your fifteen year old daughter attempted to commit suicide. It is the last burden I wanted to put on my members.
I read the NY Times article listed above, which in New York, if the provider at In Network facility is Out of Network, the insurance company the physician duke out what is an acceptable rate, and if they can’t agree, a mediator helps them come to an agreement. There is no member involvement in the process at all. You can bet that I told every New York state member who called on such a claim about the law and told them that they should contact the appropriate state resources. Since these instructions were not in our database I often was scored low on my quality audits which means I am not eligible for bonuses, decent shift bids, or promotions for a full year. This from a company that puts integrity as its number two value right in their ads. It should read more like “Integrity, as long as it doesn’t mess with our profits” .
phein55
I had a similar set of PEAR experiences after by-pass surgery in ’13. I finally got my HMO to agree to pay for the E, A and R charges, but the scary thing is, it took three or four calls into customer service to find someone who recognized what had happened. The first reps I contacted all said, “Out of network, out of luck.”
My co-workers who go to the other big clinic network here in town (there are two in Champaign-Urbana), are starting to be hit with something called “facility charges” for each office visit. So in addition to the regular office visit co-pays of $20 or $30, the clinic then charges them a facility charge per visit that can be several hundred dollars. Have you ever heard of such a thing?
kindness
Richard don’t forget that if a patient is MediCare the underlying bill can be any amount but the physician/group should not expect to be paid more than the MediCare reimbursement rates listed for that procedure and is not supposed to be able to demand more than that.
japa21
This situation is being handled in a variety of ways.
Some insurance companies are actually doing the right thing in that they are paying at in-network benefit level as long as the hospital is in-network.
Some states do require that insurance comapnies pay that way.
There was a big outcry from a lot of these hospiatl based provider groups in IL when a law was passed stating that they had to accept U&C reimbursement and it had to be paid at in-net levels. Actually, what that did is encourage a lot of these providers to sign contracts with insurance companies as they felt they could negotiate a better rate than U&C rates.
I negotiated a lot of contracts for that basic reason. The provider groups, at least their management team, realized that the cost of billing, fighting with inusrances companies, etc. was higher than their reduced compensation. And insurance companies would frequently agree to higher reimbursement for the same reason.
Fred Fnord
Happened to me twice in California. The second time I explicitly asked the hospital beforehand if I would receive care from any non-participating providers and they said ‘no’ in writing. When I went back afterward with my $10k uncovered bill they said ‘Oh, sorry, we misunderstood the question. Fortunately for us, you can’t sue us.’
Can’t come soon enough.
BGK
@RaflW:
With our local public hospital network (the only game in town), your admission forms specifically state that if you are uninsured or your procedure(s) is/are disallowed, you pay the full retail price, not what any carrier may have negotiated.
I always found it frightening that one can be laying in an ER bed and be handed three pages of dense text that tell you all the ways the hospital plans to financially ruin you.
ArchTeryx
@Fred Fnord: Why on Earth couldn’t you sue them? They just admitted openly to fraud, and you have the proof in writing.
IANAL, but I would think that an blatantly fraudulent contract is non-enforceable on its face. I’d have refused to pay, filed an immediate dispute for fraudulent conveyance with the credit bureaus, and dared *them* to sue me. As $10K would instantly bankrupt me, I would have absolutely nothing to lose.
shawn
Lab can sometimes be included with this – like for us it is PEARL providers – lab is not always an invisible provider, but sometimes – NEVER assume the lab your dictor sends you to, if s/he ever physically sends to a lab, is in network. ALWAYS check with your insurance company BEFORE you go.
Richard mayhew
@phein55: yes and will post tomorrow
Fred Fnord
@ArchTeryx: Well, there were really two reasons. One was the fact that after I made all the arrangements to check into the hospital and was all ready for everything, they said, “Oh, and by the way, in order to be admitted you need to sign this,” which included (of course) a binding arbitration agreement. This was the reason they meant. And since it’s well known that binding arbitration typically does not even examine evidence at all (so they would never bother to look at the written document I had) and just finds in favor of the one who pays their bills the vast majority of the time, obviously that’s a waste of time.
And then there’s the fact that $10,000 is more than small-claims court allows, and in order to actually sue them I would need to first prove that the contract that they made me sign was a legally dubious contract of adhesion, so that the case could be admitted to a court at all, and the legal fees would be dramatically more than anything I could hope to win. That’s the reason that convinces me.
The fun part is, if I’d refused to pay, then they could have taken me to binding arbitration, gotten a judgement against me, taken it to a real judge, and had it rubber-stamped, and then taken the money out of my bank account, garnished my wages, or whatever.
Basically, binding arbitration means companies never having to face any responsibility for their actions aside from possible bad publicity.
cmorenc
My daughter is an M.D. finishing her residency in Anesthesiology at the end of the June, with a job with a nice group waiting for her to start a few weeks later in the summer. Her group is contracted by the principal hospital they do work for, but they are not hospital employees. It will be um…interesting to see how this PEARs payment rate/incidence issue plays out with her and the group she’s joining. I cannot imagine the present paradigm continuing without significant modifications over the next few (perhaps very few) years, due to the exact sort of issues being discussed in this thread. She and her group will doubtless continue to do very well by the standards of most Americans and her forthcoming local community – but perhaps not quite as lavishly as things are now, once things shake out.
The Raven on the Hill
And in Washington state, no Exchange plan caps out-of-network expenses. Maybe, you know, the law should apply to health insurance companies as well?
Naw.
Scott
I wonder if you could carry around a card that says something to the effect “By providing services to me, you agree to charge the in-network prices of my insurance plan, which is _______” I cannot and will not be responsible for any additional charges”. I’m sure there could be better written legal document but that is the gist.
I’ve also had the fantasy of standing in the ER waiting room dripping blood on the floor while we loudly discuss the insurance ramifications of my treatment.
Adam Lang
@Scott: One suspects not, or at least not if your life is in danger. Since they are required to treat you, you can see why… I mean, for ‘you agree to charge in-network prices’ say ‘if you treat me you agree to pay me a million billion squillion dollars’, for example.
pseudonymous in nc
If you’re practising medicine in a hospital and wearing the hospital’s name badge, then you’re working for the fucking hospital and if you send a separate bill, then fuck you and I’ll see you in fucking court.