JustaWriter asked a good question last week:
An out of network specialist, like a radiologist or anesthesiologist certainly cost more for the patient than an in-network equivalent. Does that practitioner actually receive that additional money (assuming the hospital ever gets paid by the now bankrupt patient)?
The short answer is — Maybe!
The long answer is — Yes, indirectly
Let’s just think about the PEAR specialties (Pathology, Emergency Medicine, Anesthesiology and Radiology) as these specialties are the most likely to be “invisible” to patients and not be specifically chosen by a patient. Let us also think about a situation where a Radiologist is in network at Hospital X for some patients and not in network for the rest.
The radiologist gets a set of images to read. They look and what the coordinating doc feared is not showing up on the film. The radiologist makes a note, sends the informationforward and goes to the next set of images. At the same time, a bill is now being initiated and eventually the insurer cuts a check which will eventually filter down to the Relative Value Unit based compensation formula that pays the radiologist. The radiologist has no clue that this task was covered by an insurer. The next set of films is also a negative, rule-out diagnosis. It is for someone with insurance but not contracted to the radiology group. A bill gets generated and eventually the radiology group gets paid twice as much. That money will filter down as well.
At the incremental service level, a PEAR specialist who is billing out of network is really not too sensitive to the in-network/out of network distinction. They are just doing their tasks.
However, if we back away from a single hour in a single hospital, the threat to bill out of network raises in-network rates. Higher in-network rates will directly flow to the clinicians in their base salaries. The major private equity owned PEAR physician groups will have a big internal fight as to who in the employment and ownership structure collects the economic rents and snorts blow while paying the hookers. But the general threat of an entire physician group to have a viable out of network only business model does increase the in-network payment levels and general salary levels for the specialty.
- PS: I’m on vacation for the rest of 2019 so posting will be light to nil.
On The Road – Dorothy A. Winsor – Casablanca and Dakar
Brad F
David
The relationships are more nuanced, I believe. If a private group staffs the hospital, they bill and collect separate from the hospital. The hospital, however, pays the company a fee above their collections to work the clinical area. If collections drop, the corp can go back to the hospital and ask for increased fees, and a renegotiated rate–which in turn will drive higher costs–and will diffuse back to payers. I would think some of the buffers are already built in the contract to anticipate contingencies like those above.
But like Mcare FFS and Part A and Part B, hospital and doc fees separate line items. Even when outsourcing companies not used for clinical coverage, system docs typically use separate billing companies and submit on their own (but usually will far few OON issues)
Brad
dnfree
Enjoy the well-deserved time off! We’ll muddle through somehow…,
piratedan
The other side of the coin is all of the items/services that are built into these costs… because you’re paying for time and materials that are built into these services… say the administrative costs that accompany verifying you are you… then the provider network has to reach out to the pear provder and share enough data and keep it secret from the bad guys. Then there are all the people involved in getting your outcome just like everyone you see at the doctor’s office… the rad techs… the software and hardware that they use backing up the radiologist (or pathologist etc etc) and then the overhead involved in paying all that staff… which is why you’re seeing hospitals expanding and buying each other up to try and centralize those costs to keep pricing competitive.
Feathers
I see no one has posted this. Seen it twice in my twitter feed this AM. For Her Head Cold, Insurer Coughed Up $25,865
In this case, the out of network billing appears to be because the doctor is sending the test to an out of network lab that they have a financial interest in. Which is just scummy. Part of the problem is that this sort of financialization/privatization/boundary testing needs to be stamped out immediately, but the regulatory system has been crippled to work slowly, so nothing happens until the scammers have built up enough size and money to be able to block attempts to shut them down. See Uber.
WereBear
@Feathers: This is especially upsetting for those of us where the insurance company reaction was an arbitrary decision to NOT pay a much smaller bill.
I was invited to appeal it if I didn’t like it. But I was too sick to even get started on the paperwork.
feathers
@WereBear: I can’t help but think that Warren’s proposal to end anonymous shell companies would help get rid of at least some of this garbage. If doctors had to put their names on these billing entities, it would be seen more clearly as graft and corruption.
Kelly
The deductible calendar is another USA health insurance absurdity. My wife is setting up an appointment for tomorrow. Her first instinct is to put it off until January. Put the charge on next year’s deductible. So has everyone else. Doc is booked solid until nearly the end of January, however has plenty of openings this week.
taumaturgo
All the shenanigans built in our profits before care business model will not change until we the people demand a) corruption money out of politics b) do away with gerrymander congressional districts and c) vote for political candidates that genuinely support the phasing out of private insurers and wholeheartedly support MFA. Incrementalism and tinkering around the hedges will continue to be responsible for the sickness and death of millions with little or no access to healthcare.
WhatsMyNym
@Kelly: Exact opposite for me. I’ve met my deductible, so usually end up doing the extras at the end of the year.
WA has passed The Balance Billing Protection Act, which starts next year. It “prevents people from getting a surprise medical bill when they receive emergency care from any hospital or if they have a scheduled procedure an in-network facility and receive care from an out-of-network provider. In this case, if an insurer and provider cannot agree on a price for the covered services, they go to arbitration and cannot bill the consumer for the amount in dispute.”
WaterGirl
David, in case you happen to see this… I sent you email about the tableau in one of your posts earlier this week – it’s apparently causing errors of some sort. I wondered if it would make sense to remove the tableau?
Pete Mack
It has occurred to me more than once that of the 4 anagrams using the letters AEPR, PEAR is by far the least suitable acronym. REAP, PARE, and RAPE work so much better, for what these guys are gonna do to your checkbook.
Procopius
I would like to have seen a little more explanation of how the surprise bill comes about. “At the same time, a bill is now being initiated …” But who is it who generates the bill? If the radiologist works for a staffing group, he/she does not send the bill. Somewhere there is a staff person, a functionary, a bureaucrat, who decides to charge $73,000 rather than $2,000. How can we assert control over those individuals? How can we identify them? Is it always done by a clerk earning $32,000 a year? And, OT, Martin Shkreli is in jail (for unrelated offenses) and Daraprim still costs $750 a pill.