Out-of-Network Provider Charges 6,200% of Medicare

“……a physician billed a patient $115,625 for lumbar spinal fusion – 62 times the Medicare fee of $1,867“…………..
Posted on March 5, 2014 by AHIP Coverage

One challenge of health care costs is that the cost of care is unknown to many stakeholders. Without knowing prices, consumers cannot make informed decisions about where to seek health care services. This can be especially challenging when providers do not disclose their out-of-network rates, which can be 10 times – and in some cases 100 times – what Medicare reimburses for the same service.

A report by AHIP examined these out-of-network charges. The findings of the report are concerning, especially considering how these charges compare to in-network fees, as well as fees charged for similar services in other countries. For example, in New York, a physician billed a patient $115,625 for lumbar spinal fusion – 62 times the Medicare fee of $1,867. Similar examples were found in all 30 states included in the survey, and there are many examples of even higher variations in charges, despite the fact that the researchers used a conservative approach in reporting the data.

While the issue of how much is appropriate for out-of-network physicians to charge has not been part of the affordability discussion to date, this report demonstrates that it needs to be. No mechanism exists to protect patients who seek care out-of-network from receiving bills that are unreasonable and unaffordable.

Health plans create physician networks to ensure that patients have affordable access to a wide choice of high-quality health care providers. Consumers receive savings when they visit contracted providers who have agreed to lower rates, and are generally prohibited from charging patients anything above that rate. Consumers who receive services from in-network providers also typically have lower cost sharing, which, over the decades, has saved billions of dollars in out-of-pocket costs and premiums.


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