Dealing With Insurance Companies (aka lessons in terrorist negotiations)
by Barbara Kapetanakes, PsyD. on 04/01/15
I received an email this morning from a mother. I had tested her child a couple of months ago. I clearly communicated my fee, which she promptly paid, and gave her paperwork for her insurance, which she must have also promptly submitted.
In her email she informed me that I should have charged 30% less than I did, as the Explanation of Benefits from her insurance company indicated that they regularly "negotiate discounts with providers and facilities to save you money."
All this would be fine if they HAD negotiated a fee with me, which they had not. If I had an "in-network" contract with the company, they would have a right to set the fees, as the provider signs a contract to accept a (usually much lower) fee. But an out-of-network provider can charge whatever the market can handle. As I put it to this mother when I responded--I can charge a million dollars if someone is willing to pay it. The insurance company can still put a cap on what they will reasonably reimburse, but they have no right to insist I accept a lower fee when I have no contract with them.
I suggested that this mother call her insurance company and remind them that I am OUT of network, and therefore they are not ALLOWED to set my fee, and also suggested that I might report them to the State (the Attorney General deals with issues like this).
I decided to write this blog today to provide some information. Most people have only a general sense of how insurance works, and know neither the finer details nor HOW they do business (it's like dealing with the Taliban, quite frankly).
If you go to an IN network provider, that provider MUST accept the in-network fees, and you ONLY have to pay whatever in-network co-pay is required. The provider is NOT allowed to balance bill you, but must accept the contracted rate. For example, if my usual fee is $100, but United Health Care pays a contracted rate of $80, then I can ONLY make $80 on that session. If your co-pay is $10, then you pay that, United pays 70 (total of 80) and it would be illegal for me to charge you the additional $20 to make it to $100. I would have signed a contract with that insurance company, and the fees would be clear to me. Aetna may pay $70 or $85 or whatever their fees are set at, and I would have a contract that stated those fees clearly. Each insurance company has their own rates for each specific procedure code. I could wish they paid more, but I cannot get any more.
For out of network providers it is different. We set our own fees, and you can choose to see us or go to someone within your network if going out of network is not affordable. I can also CHOOSE to lower my fee for someone down on their luck, or who has no insurance, but that is MY choice, not something mandated by an insurance company unless I have signed a contract with that company. The insurance companies still set caps (reasonable and customary fees), and that's fine. We can't expect the insurance company to pay for fees that are well above reasonable and customary (although how they define reasonable and customary is a blog for another day). However, if you have chosen to see a professional who comes highly recommended, even if he or she is expensive, then that is your choice, with the understanding that your insurance may only pay a small portion.
The same way that I am not permitted to balance bill a patient who sees me as an in-network provider, the insurance company is not permitted to decide what my fees should be. This poor mother who got a notice that I owed her 30% of the fee back because a lower rate was "negotiated" is now confused and probably upset with me or sees me as "greedy" in some way. This would not surprise me. If I returned money every time an insurance company tried to put one over on us I'd be broke. It is not up to the insurance company to decide what I can charge, even if it is up to them to decide what they will or will not reimburse.
Insurance companies are panicking because President Obama has told them that they have to cover certain things such as yearly physicals and mammograms (for FREE). The Affordable Care Act eliminates things such as lifetime maximums and lowers the out of pocket costs we can expect to pay. Because so many people declared bankruptcy due to medical expenses, the ACA aims to stop that bleeding. Make no mistake, insurance companies are multi-billion companies and their executives make millions. They are seeing the changes and don't like them. So they look for all kinds of reasons not to pay bills. They have also increased many people's deductibles (not a terrible trade off for no longer having a lifetime maximum of coverage. Truth is, a bout with a life threatening illness like cancer can eat up that lifetime maximum in 12 months).
I am in-network for only one private insurance company as well as a Workers' Comp provider. The private company is about 6 months behind on paying claims. And Workers' Comp often takes weeks if not months to approve service and pay claims. This is what we providers are used to, and we deal with it. But neither we nor our patients should have to deal with outright lies written up on an EOB stating that someone overpaid. My patients don't deserve this runaround, and I have to pay my bills and put food on the table, and I have set the reasonable and customary fees for my expertise and geographic location, and I have a right to do so in order to make a living.
I have been on the other side of this as well, when I had a test in a hospital that my insurance company refused to pay for. I never really understood what the problem was except that they would have paid for a more expensive, risky procedure (eg, general anesthesia rather than Lydecaine), and/or if it were in a different area of the hospital building (eg, in-patient/out-patient/ambulatory/etc). I spent a solid year fighting the insurance company on this issue and finally worked out a payment plan with the hospital. I still remember Melinda's voice, as we became great buddies during that time...."Hello, this is Melinda from accounts receivable"......
We all know we have to beware when buying a vacuum cleaner, a blouse, a home, to check freshness dates on a container of milk, etc. But when we are sick the last thing we should be saddled with is getting the runaround from our insurance companies, but it happens. Caveat emptor.