AHIP Attempts to Portray Doctors as Villains
AHIP Attempts to Portray Doctors as Villains
Our guest blogger is Emma Sandoe, Health Policy Intern at the Center for American Progress
In recent weeks, the Obama administration has refocused its campaign on current insurance market practices as the cause of rising costs.
Attempting to shift the blame to doctors’ fees, Karen Ignagni and America’s Health Insurance Plans (AHIP) released a report yesterday on out-of-network physician billing. “No politician has asked how much is being charged,” Ignagni said. HR 3200 requires disclosure on out-of-network costs, reduces overpayments, and changes Medicare payment rates to doctors and hospitals.
The study compared out-of-network billing rates to Medicare rates. Out-of-network physicians are free to charge non-negotiated, often times higher rates. The study attempts to show the arbitrary nature of procedure pricing or as Dr. Uwe Reinhardt calls it, “lunacy”:
“Some out-of-network providers are charging exorbitant prices – several hundred or even over a thousand percent of the Medicare reimbursement for the same service in the same area. Recent examples: … $40,000 for a total hip replacement when Medicare would have paid $1,558.”
While physician fees are a part of the cost problem, this study does not show the role of private insurers in the billing process and fails to address in-network private insurance billing rates, which make up over 90% of claims. Including these lower in-network rates would undoubtedly prove that a vast majority of billing rates are lower than the excessive out-of-network rates.
Moreover, the procedures by the insurance industry are not comparable across Medicare and private insurers. Procedures such as hip replacement, coronary bypass, and cataract surgery are more common in the +65 year old population and oftentimes involve more expensive conditions in younger patients.
Highlighting Medicare as a comparison is deliberative. Back on the offensive, AHIP is resorting to their previous cost shift argument that the government reimburses too low forcing insurers to pick up the cost.
6 Responses to “AHIP Attempts to Portray Doctors as Villains”
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THIS IS CRAP
August 12th, 2009 at 5:40 pmKaren Ignagni is not tricky enough to outfox us with her “objective reporting” of how the insurance industry has been wronged. Keep the truth flowing–we’re fighting the good fight!
August 12th, 2009 at 5:45 pmTo inject the viewpoint of a physician who has worked within the claims department of a major health insurer I present the following:
August 13th, 2009 at 3:18 amYou are correct in your analyses concerning reimbursement percentages involving out-of-network vs. in-network and medicare/medicaid charges which are ‘negotiated’ and agreed to per contracts with providers (physicians and hospitals).
In addition, you may have recently read about the way insurance companies detemine resonable and customary fees for services. The methods and math are from my perspective questioable at best. Insurance companies NEVER pay what is billed- they pay R&C, which they themselves determine. Here are two informative links:
The fuzzy math of health insurance
http://www.nytimes.com/2009/01/17/opinion/17sat1.html
On top of these shinanigans, any amount not paid out by insurance because it’s over R&C is the responsibility of the patient.
Plus, what I have witnessed is a consistent tendancy to define R&C and negotiated rates on the current medicaid accepted rates which are AT MOST 10% of the lowest cost for a specific service by a provider. AND, the amount is frequently less than the cost of a copayment, particularly for office visits and minor procedures.
What this means is that the copay amount is frequently all the physician receives for services, the insurance company never has to pay out.
This is why the insurance companies like to use medicare/caid as comparative bases- they have payout rates negotiated so low, they want to pay those low rates. If providers did not have to fork out 30% of their gross for the overhead related to health insurance, they would be able to stay in business just fine, for the most part. Look around your town or city. I am sure you will find practitioners who have foresworn health insurance for this reason. It is the insurance companies in the end that force prices up- by keeping payments down.
It is a huge scam. I do not and will not deal with insurance companies in my practice. They waste my time, my patients time and cause extreme stress and dismay that can affect the course of an illness. EL MD
Great insight on the comment above – as a patient it’s hard to believe this stuff goes on. I really hope we pass health care reform and end these ridiculous practices.
August 13th, 2009 at 9:07 pmYOU ROCK EMMA! Right on!
August 14th, 2009 at 11:43 amEmma, this was a well-written and informative post – thank you!
August 17th, 2009 at 8:30 am