A True Story
“I want to go to MD Anderson!” says Mary. “But they won’t take our insurance!”
“You mean they won’t take an Assignment of Benefits” says the nice HR lady. “Our plan will always pay for eligible benefits no matter where you go, even if the provider does not accept an Assignment of Benefits. In those cases the plan will reimburse you the same amount the plan would have paid the provider.”
Mary takes a pull on her flask.
“May I make a suggestion?” asks the ever so patient HR lady. “Why don’t you go to a cancer center that’s just as good that does take our plan? We have several we can refer you to and you may even qualify for free care through our Care Navigation program.”
“NO, I WANT TO GO TO MD ANDERSON!” screams Mary. “THAT’S WHERE PEOPLE WITH CANCER GO TO GET CURED!”
“Ok fine. Here’s what I suggest you do. Enter the list of services your doctor has ordered on MD Anderson’s Cost Estimate Tool to get a price estimate for the services you will need. Give us the same information. Then we will compare what the plan will pay to what MD Anderson will charge. If charges are more than what the plan allows you will owe the difference. Fair enough?”
Days later a smiling Mary arrives at the HR Department with paper in hand. “Hi, I negotiated a direct agreement with MD Anderson! It’s a 15% discount off billed charges! I need you to approve this so I can go get cured!”
“I’m sorry” says the solemn HR lady. “Our fiduciary duties don’t allow us to agree to a contract without knowing what the cost is going to be. And the cost has to be reasonable. We cannot agree to a Charged Based Contract. We cannot agree to pay a price based on a percentage off an unknown number because it can be any number they want. A 50% discount off double the price is an example of what I mean.”
“I insist! screams Mary. “You WILL pay for my MD Anderson visit. I’m going to upper management for help. WHAT KIND OF INSURANCE IS THIS!!!!!”
Mary is a key employee with power. “I have pictures!” threatens Mary to upper management. “You must approve this Agreement and you must do it now or else!”
So they do. Mary has a routine procedure done at MD Anderson costing +$9,000 that could have been done almost everywhere else for $1,500 or less. Mary’s plan paid 6 X’s more for Mary’s procedure than what the plan would pay for any other plan member getting the same procedure. All because Mary wanted to go where she wanted to go and she wanted her co-workers to pay for it
“That’s discrimination!” says a co-worker. “If Mary can get an exception, so should the rest of us even though we don’t have pictures. If we are denied our demands in the future we’ll sue the plan! And win!”
“You have violated your fiduciary duties!” says another. “Your dereliction of duties has caused my costs to go up. I’m bringing a lawsuit against the plan! I have a contingency lawyer standing by!”
MD Anderson, a Texas state owned hospital, has done a great job branding themselves as the best place to go when one gets cancer. They have created strong demand for their services. People will pay any price for a cure and a longer life. MD Anderson knows that. They also know people generally believe higher prices means higher quality.
Meanwhile across the Fruited Plains less fortunate patients seek cancer treatment at second rate facilities, doomed to an earlier death. At least that’s the perception shared by a whole lot of Mary’s out there.
ACA Market Place plans including Blue Cross don’t cover MD Anderson. In Texas there are over 3,000,000 insureds in the ACA Market Place risk pool. Should these insureds file a class action lawsuit against these Market Place plans for “purposely” sending patients to second rate cancer centers, suffering an earlier death in order to save money?
Of course not.
