Thu 23 Mar 2006
A friend of mine told me her regular doctor is considered “out of network” by her insurance company, but this is okay with her because it actually costs her less while he gets more than if he accepted her insurance. Wacky, you say? Impossible, you say? Nope, totally real.
The various times I’ve started a new job with a health plan and looked over the benefit summaries provided by Human Resources, the summaries generally showed the insurance companies paying a flat percentage for “out of network” services.
Now, in the case where I got jacked for an extra $150 by an unexpectedly “out of network” doctor, they didn’t pay a flat percentage. They paid based on their allowable rates.
Why the change in policy? My friend’s story may shed some light on it.
Her doctor discovered that if he refused to take a patient’s insurance and billed high, those flat percentages alone (without the patient paying the remaining amount) paid more than if he took the insurance and charged the allowable rate. So for patients with plans paying a flat percentage, he’d bill high, get the insurance’s flat percentage payment, and not make the patient pay the rest of the bill. He got paid more and the patient paid nothing. Sounds like a win-win to me.
Now, I’m not a lawyer, and though I just said this sounds like a win-win (at least for the patient and doctor), it also sounds like it might be insurance fraud. But so often, the insurance companies are the bad guys. In the news, in many people’s experiences… I was inspired to register rotinhell.com to have a little site where I could put the guys who determined auto insurance rates. It is very easy to dislike insurance companies and cheer on the little guy.
So, on the one hand you have the fact that it’s technically cheating and may be illegal. On the other hand, you have a doctor who treats you very well, who you respect, who you like, and you’re benefitting too… would you consider this a good doctor trick or a bad one?
Post your answers to that question below. But, for Pete’s sake, don’t say you’ve done this. If this doctor trick is also a crime, you don’t want to get you and your doctor in trouble. Keep it hypothetical, people.
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May 9th, 2006 at 10:30 pm
I believe that the “billing high” you refer to is the normal billing, which I believe its perfectly legal. When doctors contract with insurance companies, they are actually “accepting low”. But insurance companies have enough market power to force low charges onto doctors. Such charges customarily mirror the medicare schedule, which squeezes every possible penny of profit from doctors. The government agencies, such as CMS, CBO, etc., know precisely how hard they can squeeze before the remaining private practice fee-for-service docs will be unable to practice. Anyway, I don’t believe that billing their normal “cost-plus” ffs rate is illegal, unethical, tricky, or any of that.
May 22nd, 2006 at 10:34 am
I think it is not only unethical, but somewhat illegal. What if the good doctor sold his practice and the new doctor decided to audit the billing and discovered the vast amount of underpaid bills by the patients. I think he would have legal grounds to come after all those accounts as delinquent and rightfully so as it appears that none of the charges were ever disputed.
October 15th, 2008 at 8:28 am
the premise is a fallacy, i bill for doctors all over the country, insurance companies control all aspects of payments, the doctor has no control, it does not matter what he bills, in network or out of network, the insurance company pays what it wants, if the doctor bills for something he/she did not do, that is fraud and is indefensible, but the insurance companies grossly underpay the average doctor for every legitimate visit they make, FYI: Medicare is the highest payer in the country, most commercial carriers pay between 40% and 60% of Medicare allowed rates.