Tendon surgery sheds light on the lack of clarity in some out-of-network pricing

In the health care business these days, its all about the networks.

Spurred on by competition on the new Affordable Care Act exchanges, health insurers are moving to pare down their provider networks, promising participating hospitals and doctors more patients in exchange for lower payments.

Docs are busy selling out their practices to hospitals that can negotiate better rates for their services, giving up their independence to become salaried hospital employees.

And together, hospitals and large medical groups are joining accountable care networks in which, like insurers, they agree to provide all of a familys medical needs for a fixed annual fee.

Its one reason perhaps a big reason why medical costs have begun to level off in recent years. But its not without its trade-offs. Lower rates and higher volumes at hospitals and doctors offices often translate into inferior service for patients longer waits, rushed appointments, less help from the staff. And if you find yourself outside the network, its apt to be very expensive, whether you intended to go out of network or not.

There have been numerous stories in the news recently about people who carefully take the time and effort to arrange for an in-network surgeon to perform an operation at an in-network hospital only to find a bill in their mailbox a few weeks later for thousands of dollars from the out-of-network anesthesiologist, or pathologist, or assistant surgeon who were brought in on the operation without their knowledge and approval.

Or the people who, even in the ambulance, have the presence of mind to request to be taken to an in-network hospital, only to find out later that the entire emergency room operations has been contracted out to an out-of-network provider who bills at three, five, even 10 times the in-network reimbursement rate.

Theres no data on how often this happens, but as networks have tightened, industry experts say, its happening more and more. A recent study ordered up by the Texas legislature found that half of the hospitals that participated in the networks of that states three biggest health plans had no in-network emergency room doctors. And nationally, an estimated 65 percent of hospitals contract out some or all of their emergency room functions. Many of the largest ER contractors do not participate in any insurance networks.

Hospitals say they often have no choice but to rely on non-staff doctors because there are not enough willing to work on a hospital salary or to put it another way, some hospitals refuse to pay the market rate. Hospitals also argue that scheduling of surgery is often so fluid and last-minute that there is not enough time to inform patients in advance that they will be treated by out-of-network specialists.

Several states, including Maryland, California, Colorado and most recently New York, have passed laws restricting balance billing by non-network providers for genuinely emergency services. In most cases, those laws leave it up to the hospitals and the patients insurers to negotiate the payment. A similar restriction is contained Obamacare, although initially it only applies to newly established health plans.

Continued here:
Tendon surgery sheds light on the lack of clarity in some out-of-network pricing