Years ago, Caveat Emptor (Buyer Beware) was a warning that was frequently associated with real estate. Fortunately, the world has changed (for the better), Caveat Emptor was booted out long ago and Disclose, Disclose, Disclose has almost replaced Location, Location, Location as the by-line for the real estate industry. And, if you're in the mortgage banking field, heaven forbid that you miscalculate the Good Faith Estimate (GFE) by more than 5 cents because the Consumer Financial Protection Bureau (CFPB) will fine your company Three Billion Dollars, clap you all in irons and burn down your building.
Poor Caveat Emptor is homeless (or is it)?
Fear not! The health care and insurance industries have taken it in.
In January of 2015 I had a series of blood tests done at the direction of one of my physicians. At that time, I had the blood work done at Quest Laboratories. As expected, because of my high deductible, none of the cost was covered. The total charges for the tests were $3,476.10. However, since I went to a "Participating Provider", the maximum allowed amount for the the services provided was $763.49 and that is what I was responsible for even though my insurance company paid nothing. It didn't make me happy but it didn't cause me to hyperventilate.
Fast forward to October of 2015. I had the same series of blood tests done. This time, however, I made the mistake of choosing to have the blood work done at the lab at Elliot Health Care (also a "Participating Provider") because that is where my PCP is and I had the crazy idea that it would be faster, easier and more convenient if it was done there and that the results would go into my "E-Chart". Unfortunately, I was wrong on all counts.
Even more unfortunately, when I received the bill, I definitely needed a paper bag. Even though the total charges for the tests were not hugely different than the charges from Quest (and why should they be, they were the same tests), the "maximum allowed amount" was more than three times as much! So instead of a bill for $763.49, I was presented with a bill for $2,413.30 FOR THE SAME TESTS! I'm still hyperventilating!
Initially, I thought it was a mistake in identifying the service provided. When I reviewed the Explanations of Benefits provided by my insurance company for each episode, I noticed a marked difference. The EOB for the Quest tests was detailed out with each test on a separate line indicating it's code, the billed amount, the maximum allowed amount, etc.
On the other hand, the EOB for Elliot simply said "Hospital Expense" with one ginormous dollar amount. Apparently, the maximum allowed amount, if you lump it all together and call it a "Hospital Expense", is significantly higher...about three times higher. Mind you, I was neither a hospital patient nor did I go to the hospital for this blood work.
I called my insurance company, Assurant Health, to question this. I fully expected them to say it was coded incorrectly (actually there was no code on the EOB). But no! What I was told was, "Elliot Healthcare Systems" is considered a hospital and they can charge you more. I called Elliot and was told pretty much the same thing. I did ask for an itemized bill and, after two tries, eventually got it. There is no real difference between the tests run nor should there have been since my doctor simply re-ordered the same tests.
Now here's the real rub, it's not actually the total charges that are substantially different. What is different, apparently, is the "negotiated" rate agreed to between the provider and the insurance company. These negotiated rates are part of the contracts between insurance companies and providers. Contracts that we, as healthcare consumers, are not privy to. We do not find about the difference in allowable rates until we have already incurred the cost. Consumer Protection where are you?
I pulled out and read ALL.136.PAGES.OF.MY.POLICY. It clearly states that the policy holder is responsible for determining if a provider is a Participating Provider or a Non-Participating Provider because Non-Participating Providers may bill more than "we" (Assurant) determine to be a Maximum Allowable Amount and the covered person is responsible for payment of any amount billed above the Maximum Allowable Amount. It further states that the covered person is not responsible for payment of amounts billed by a Participating Provider in excess of the Maximum Allowable Amount.
NOWHERE does it say that the Maximum Allowable Amount for the SAME SERVICES could be three times higher from one Participating Provider to another. Since it would be perfectly reasonable for a healthcare consumer to expect that the SAME services provided by Participating Providers would have the SAME maximum allowable amount surely, either the Insurance Company or the Provider (or both) have an obligation to inform the healthcare consumer that this is not the case.
In this age of "informed consent" and making sure the consumer "knows before they owe", I find it absolutely mind boggling that this kind of back room dealing and "gotcha" billing are legally allowable.
Caveat Emptor has definitely found a cozy new home...snuggled right in between the insurance companies and certain health care providers.
What are your thoughts?