February 3, 2013

Outpatient markups fuel outrage

A battle is brewing nationwide over billing by outpatient surgery centers.

By CHAD TERHUNE Los Angeles Times

(Continued from page 1)

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health insurance
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Long Beach, Calif., teacher Lynne Nielsen protested after her insurance company was billed $87,000 for her routine knee surgery.

McClatchy Newspapers

The school system is self-insured, meaning it pays its own medical bills and uses Blue Shield to administer its benefits and process claims.

In other situations involving out-of-network care, it's common for insurers to pay only about 60 percent of what's deemed to be "usual and customary" charges or some percentage of Medicare rates. Insurers and out-of-network medical providers routinely spar over what constitutes a reasonable amount.

Kominski, the UCLA professor, said he faulted both Blue Shield and the school district for "dropping the ball on this. There were lots of opportunities for red flags to go off on such an outlandish bill."

After defending its handling of the claim, Blue Shield reversed course recently and stopped payment on its $84,800 check. It told Nielsen the surgery center had agreed to accept $15,000 instead.

Overall, Blue Shield said, it expects to have new measures in place soon to better address these out-of-network billing issues for certain employer health plans. It also said employers should do more to encourage workers to use in-network facilities that are paid negotiated rates.

The Long Beach school district expressed frustration at the teacher's bill, but it echoed Blue Shield's explanation that it will incur additional costs at times because it has promised employees out-of-network benefits.

Joe Boyd, executive director of the Teachers Association of Long Beach, said there is nothing in the employee contract to prevent the school district and Blue Shield from rejecting inflated medical bills.

"We don't want the school district or our members ripped off," Boyd said.

Nielsen said she remains angry that Blue Shield declined to do anything when she first complained about the situation in December. She plans to continue pursuing the matter with the attorney general's office, which, records show, has begun an inquiry.

"Our insurance premiums wouldn't keep increasing," she said, "if they paid a fair amount for these procedures."


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