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Wednesday, February 28, 2007
Not law but important - More on negotiating medical bills
This Aug. 19, 2005 ILB entry quoted from a number of stories about negotiating medical bills, a topic applicable to both the uninsured, and to the larger and larger pool of those with high deductible medical insurance. A line from a WSJ story quoted in the entry: "The growing effort to enlist consumers in reducing health-care costs has been stymied by the fact that most people just don't know what medical care costs."
Yesterday the NY Times had this story in its Science Section, headlined "Bargaining Down That CT Scan Is Suddenly Possible," that seems to show some progress for the health consumer. A quote:
Patrick Fontana twisted his left knee last spring while hitting a drive down the fairway on a golf course in Columbus, Ohio. But what really pained him was the $900 bill for diagnostic imaging ordered by his doctor.Mr. Fontana, a 42-year-old salesman, has a high-deductible health plan coupled to a health savings account. Since he was nowhere near meeting his deductible, he was on the hook for the entire bill.
So he did something that insurance companies routinely do: he forwarded the bill to a claims adjuster, in this case My Medical Control, a Web-based company that reviews doctor and hospital bills for consumers.
After concluding that Mr. Fontana was not getting the best possible price, the company’s representatives called the imaging facility and demanded a lower one, promptly saving him $200 — minus a 35 percent collection fee.
“I asked before I went in to the clinic how much it would cost, and they just will not tell you,” he said later. “I didn’t know until I got the bill, and at that point I figured I had nothing to lose.”
The savings are possible for one reason: medical care is often priced with the same maddening, arbitrary opacity as airline seats and hotel rooms.
“The average provider — doctors or hospitals — has between 5 and 100 reimbursement rates for the exact same procedure,” said Timothy Cahill, president of My Medical Control (mymedicalcontrol.com). “A hospital chain with multiple locations may have 150 rates for the same procedure. Consumers don’t know this.”
The varying reimbursement schedules, negotiated between the nation’s 850,000 providers and more than 6,000 health plans, have been kept all but secret. Consumers almost never get information on prices before treatment. Even insurers do not know what other health plans are paying.
Despite the complexity, the Internet has begun to open a window on this surreal world, allowing consumers to compare costs and, occasionally, to discover affordable alternatives. * * *
While only the health plans know the actual numbers, a few Web sites recently have posted some surprising estimates.
Extrapolating from federal Medicare data, Vimo (vimo.com), a small Web start-up in Mountain View, Calif., tries to estimate the fees negotiated by insurers for a variety of hospital procedures.
While the price for a cornea transplant at Wills Eye Hospital in Philadelphia is an estimated $15,000, for example, the reimbursement rate negotiated by insurers is likely to be closer to $4,700, according to the Web site.
The reimbursement rate nationally is still lower: $3,900, by Vimo’s calculation. “We were shocked,” said Chini Krishnan, chief executive of Vimo. “We had no idea that the pricing inefficiencies could be so extreme.”
Posted by Marcia Oddi on February 28, 2007 07:55 AM
Posted to General News