Insurers Point to High Out-of-Network Charges in New Report

In California and across the U.S., some physicians who provide out-of-network care charge significantly higher rates than what Medicare pays for certain treatments, according to a report from America's Health Insurance Plans, the Los Angeles Times reports.

For the report, AHIP surveyed health insurers in the 30 largest states about their highest bills for out-of-network services (Terhune, Los Angeles Times, 2/1).

Calif.-Related Findings

According to the report, a pathologist in California charged $8,100 for a tissue exam, which is 63 times higher than the $128 Medicare reimburses for the procedure.

Other out-of-network charges highlighted by California insurers included:

  • A $30,000 charge to remove a gallbladder using a laparoscope, for which Medicare reimburses $778;
  • A $23,360 charge for a knee arthroscopy, for which Medicare reimburses $640; and
  • A $19,272 charge to repair a bladder defect, for which Medicare reimburses $778 (AHIP survey, January 2013).

Implications for Policyholders

Some observers have criticized insurers for too often agreeing to pay excessive charges for out-of-network care and then passing along the increased costs to policyholders in the form of higher premiums (Los Angeles Times, 2/1).

According to the report, policyholders see measurable savings when they visit contracted health care providers because in-network physicians generally are prohibited from charging patients the difference between billed charges and a negotiated rate.

In addition, the report said that policyholders who receive treatment from in-network providers typically have lower cost-sharing obligations (AHIP survey, January 2013).

Christopher Johnson
What are we characterizing as a "report" these days? This is almost entirely anecdotal evidence, and, even at that, many critical details are left out, such as were the services rendered in an emergent setting? The methodology section is three broadly-worded paragraphs. This report is like saying look what some vendors are charging for bottled sodas in California by reporting the three highest hotel mini-bar prices.
Angela Sisneroz
The above report only serves to justify that Medicare's reimbursement to providers is too low. While the charges mentioned above may be exorbitant, patients need to know the true reason providers fee schedule is significantly higher than what Medicare pays. Currently, due to the current low reimbursement policies of most payers, providers have to establish their fee schedules at a significant higher rate then Medicare to help offset the low reimbursement from government payers, as well as many payers they contract with or they would go out of business. A physician/provider has the right to establish their fee schedule for the services they provide based on their level of expertise and overhead. It has been the work of many in the industry to try and tarnish and persecute providers as the only reason for the high cost of health care.

to share your thoughts on this article.