Report: Out-of-Network Provider Charges Strain Healthcare System

Out-of-network physicians and providers have been found to charge patients up to 100 times higher than what Medicare would pay, and a report from America's Health Insurance Plans — the lobbying arm of the health insurance industry — said this is exacerbating the healthcare cost crisis in the country.

AHIP collected data on the highest billed charged for selected services that out-of-network providers sent to health plans in 2011. Some of the anomalies AHIP found included:

•    An out-of-network physician in New York charged a patient $115,625 for lumbar spine fusion, roughly 62 times what Medicare would pay ($1,867).
•    In New Jersey, a patient was charged $34,366 for knee arthroscopy/surgery, 48 times the $718 Medicare fee.
•    An out-of-network provider in Texas charged $8,040 for a tissue exam, nearly 76 times Medicare's $106 fee.

AHIP President and CEO Karen Ignagni told the New York Times, "When you're out of network, it's a blank check. The consumer is vulnerable to 'anything goes.' Unless we deal with cost, we won't have affordability."

However, some physicians have criticized AHIP's report. The American Medical Association said research shows total physician services account for only 16 percent of healthcare costs.

Andrew Kleinman, MD, vice president of the Medical Society of the State of New York, told the Times, "there are outliers in every profession," and he added that health insurers have manipulated their out-of-network payments to physicians to lower levels like Medicare instead of commercial rates.

More Articles on Out-of-Network Providers:

Health Insurers Target Out-of-Network Surgery Centers
California Bill Would Limit Hospital Charges on Out-of-Network ED Patients
Report: Out-of-Network Medical Costs Catch New Yorkers Off Guard

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