Making Sense of Out of Network Medical Overcharges: Get it, Got it, Good!

May 5th, 2009. By LucyC

 

Here’s a riddle: what’s something you never want to be without but you can never quite “get”?

 

Answer: Health Insurance.

 

Particularly if you live in New York and you’ve been trying to “get” your out of network Explanation of Benefits statements. The recent NY Attorney General’s Health Care Report determined the database used by many big-name insurers (think Aetna, Blue Cross Blue Shield, Cigna, Health Link, Unicare, United Health Care, Wellpoint/Anthem) to compute out-of-network fees has been understating “usual and customary” rates. Translation: you may have paid more than you should’ve when going out-of-network.

 

How so? Here an example.

 

Assume you’ve reached your deductible (the amount you must first shell out before your reimbursements kick in).

 

You go to an out of network doctor. The office visit is $100.

Your plan covers out of network charges at 70%.

Your insurance company says the Usual and Customary rate for this visit is $80.

Your insurance company doesn’t care that you were charged $100.

Your insurance company doesn’t care that every doctor where you live charges $100 for the same visit.

Your insurance company says the Usual and Customary rate for this visit is $80. Period.

You are not reimbursed for 70% of the $100 bill that the doctor charged you (ie, $70).

You are reimbursed for 70% of the $80 the insurance company says the doctor visit is worth. (ie, $56)

You just got screwed out of $14.

 

Ok, $14 is a few cups of coffee—but increase the number of visits or throw in a hospitalization and…you get the picture.

 

Make sense? It shouldn’t. But what you need to understand is that usual and customary rates (UCR)—the ones that really determine your bill—used to be determined by a subsidiary of UnitedHealth, Ingenix. Ingenix collected data on provider fees from each geographic area to fairly reflect the fees in each market. Where did Ingenix get its data from? Health insurers. And health insurers allegedly manipulated the data they supplied to Ingenix so that usual and customary out of network charges would appear to be less, ultimately making out-of-network reimbursements (to you!) less.

 

A settlement has since been reached that a new independent, non-profit organization will determine UCR’.

In the meantime, you may want to pull out some of those Explanation of Benefits statements you have.

 

See a list of companies currently under investigation

Tags: Aetna, Blue Cross, Cigna, health insurance, out of network medical charges, United Health Care

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