If running a self-insured medical plan has taught me anything, it's that I am glad I have access to the network discounts for routine and non-routinue medical procedures provided to me by our medical provider (think Blue Cross, Aetna, Cigna, etc.). Depending on your medical provider's market share, it's not uncommon for insurance providers to have agreements with doctors that provide up to a 50% discount from the sticker price provided by M.D.'s and surgeons.
God help those without insurance or access to government programs. I'm guessing those folks are the ones who get stuck with the full retail sticker price for an operation, then spend the rest of their lives trying to dig out of the resulting debt since they held 100% responsibility for payment.
Here's another ugly angle to the current healthcare system. A nasty process called Balance Billing. A description from BusinessWeek:
"As health-care costs continue to soar, millions of confused consumers are paying medical bills they don't actually owe. Typically this occurs when an insurance plan covers less than what a doctor, hospital, or lab service wants to be paid. The health-care provider demands the balance from the patient. Uncertain and fearing the calls of a debt collector, the patient pays up.
Most consumers don't realize it, but this common practice, known as balance billing, often is illegal. When doctors or hospitals think an insurer has reimbursed too little, state and federal laws generally bar the medical providers from pressuring patients to pay the difference. Instead, doctors and hospitals should be wrangling directly with insurers. Economists and patient advocates estimate that consumers pay $1 billion or more a year for which they're not responsible.
Yolanda Fil, a 59-year-old McDonald's (MCD) cashier in Maple Shade, N.J., got tangled up with balance billing after gall bladder surgery in 2005. She and her husband, Leon, a retired state transportation worker, have coverage through Horizon Blue Cross Blue Shield of New Jersey. Horizon made payments on Fil's behalf to the hospital, surgeon, and anesthesiologist. Then, in 2006, Vanguard Anesthesia Associates billed Fil for an unpaid balance of $518. Soon, a collection agency hired by Vanguard started calling Fil once a week, she says. Although she thought her co-payment and insurance should have covered the surgery, Fil eventually paid the $518, plus a $20 transaction fee. "I didn't have any choice," she says. "They threatened me with bad credit."
Nice. So the doctor's have signed the insurance provider's contract, which clearly states at what rates they'll be reimbursed for different procedures. Then, in pure "let's go fishing" mode, they send out invoices that make it appear your employees are responsible for a greater amount that they paid at the time of the procedure via co-pay/deductible.
Who gets blamed? A combination of the insurance provider and the HR team, for obtaining a provider who couldn't give them cost certainty. Especially troublesome is the fact that doctor's will often go after balance billing of less than $1,000 since they know the pay rate for these will be higher. After all, if you're threatened with a $500 bill hurting your credit rating and don't have the time or knowledge to research it, many of us are apt to dig deep, pay the bill and move on.
That stinks. Keep your eyes out for balance billing coming to an employee near you. (More below from CBS News, email subscribers click through for video).