The health insurance industry's trade group wants state and federal policymakers to examine what it claims are "exorbitant" out-of-network charges by physicians that are detailed in an industry-sponsored survey released today.
The America's Health Insurance Plans report, a survey of physician out-of-network charges in the 30 largest states, found what AHIP claims are wide disparities in the cost of various services that were in some cases tenfold higher than Medicare reimbursements for the same service in the same area. Susan Pisano, AHIP vice president for communications, calls the figures "pretty startling."
"It is important for this to be in the public domain simply because there is nothing from preventing somebody from charging that much. You basically can charge whatever you want," says Pisano.
The survey's release comes one day after President Obama leveled blistering criticism at the private health insurance industry at a town hall meeting in Portsmouth, NH. The president told a clapping, cheering crowd that "right now we have a healthcare system that too often works better for the insurance industry than it does for the American people. And we've got to change that."
Pisano rejects suggestions that AHIP's new report was an attempt to deflect the negative publicity from the president's broadsides.
"Certainly, we have been publicly vilified, but there are bigger questions here," she says. "We've been having a lot of discussion about how much health plans pay doctors. We've been having a lot of discussions about what the appropriate levels are for out-of-pocket costs and cost-sharing limits for consumers. What we haven't been having a discussion about is what is being charged. If we are going to be having thoughtful policy discussions, we need to have all of that information. So far, it's been all from one perspective. What do you think that says about the discussion?"
Pisano says AHIP hired Dyckman & Associations, the Washington, D.C.-based consultants, to compile the survey after hearing repeated complaints from its members about exorbitant out-of-network charges. She says the survey findings should prompt state and federal policymakers to investigate out-of-network charges and compare them with in-network charges, as well as fees charged for similar services in other countries.
In one state, the survey found, a physician billed a patient $6,791 for "cataract surgery with insertion of artificial lens" more than 1,100% of the Medicare fee of $581. Pisano says similar examples were found in all 30 states, and there are many examples of even higher variation in charges. She says the survey was "conservative," did not cherry pick egregious examples, and had been purged of dubious or extreme outliers.
Jon Skinner, a healthcare economist at Dartmouth College, says he believes that "some truly high payments are floating around." He noted similar findings in other studies, most recently a July 19 report by Health Reform Watch at Seton Hall University's School of Law, Health Law & Policy Program.
"The question of what providers charge is of course very, very important for the overall costs of healthcare," Skinner says. "However, I do not think that high prices charged by out-of-network providers are a large factor in why healthcare costs are so expensive. It is symptomatic of a more general problem with U.S. healthcare—the lack of information about and attention to prices."
The survey's release comes at a time of high anxiety for the health insurance industry, which has been the focus of sharp criticism from the Obama Administration. The industry strongly opposes Obama's call for a public plan to compete with private insurers, which Obama says is needed to keep private insurers "honest." Private plans, however, say they would be placed at a competitive disadvantage.
On Tuesday, the president blamed reform critics for mischaracterizing the public plan as a government takeover. "This is not about putting the government in charge of your health insurance. I don't believe anyone should be in charge of your health insurance decisions but you and your doctor," he told the crowd. "I don't think government bureaucrats should be meddling, but I also don't think insurance company bureaucrats should be meddling. That's the health care system I believe in."
Sounding like a consumer activist, Obama told the crowd that stronger oversight of the private healthcare sector is needed "just make sure that private insurers are treating you fairly so that you are not buying something where if you failed to read the fine print, next thing you know, when you actually get sick, you have no coverage."
"Under the reform we're proposing, insurance companies will be prohibited from denying coverage because of a person's medical history. Period," the president continued. "They will not be able to drop your coverage if you get sick. They will not be able to water down your coverage when you need it. Your health insurance should be there for you when it counts—not just when you're paying premiums, but when you actually get sick. And it will be when we pass this plan."