Yet another health insurance ripoff

This one is a bit complicated. It has to do with out-of-network providers--those who are not contracted with the health insurance plan.* Big insurers such as UnitedHealthcare, Cigna and Aetna use a data analytics firm called MultiPlan to determine how much out-of-network medical providers should be paid. Both MultiPlan and the insurance companies cut reimbursements to providers as much as possible, which means saddling patients with large bills. The smaller the reimbursement, the larger their fee.

Example: A woman with a complicated and serious condition saw an out-of-network specialist, whose bill was open to negotiation by her insurance company, UnitedHealthcare. UnitedHealthcare paid the doctor $5,449.27—a fraction of what he’d billed the insurance company. The patient received a bill of more than $100,000. The difference between the bill and the amount paid equals a savings for the employer who provides the insurance. But it also means big money for both MultiPlan and the insurer, since both companies often charge the employer a percentage of the savings as a processing fee.

The burden can fall hardest on people with chronic or complex conditions who see specialists, including treatment centers for mental health or substance abuse treatment. Here’s another example, this one related to a substance abuse treatment facility: For providing treatment, the facility received $134.13; for processing the claim Cigna received $658.75; for recommending a payment amount, MultiPlan received $167.48.

MultiPlan affects more than 100,000 health plans covering more than 60 million people. It has annual revenues of about a billion dollars. Former employees talk about a numbers-driven culture in which their bonuses were tied to their success in reducing payouts. It’s a private equity company, as are many physician groups and hospitals nowadays. Last year it identified nearly $23 billion in bills from various insurers that it recommended not be paid.

To be honest, I don’t fully understand the intricacies of these shenanigans. Nevertheless, I thought it was worth mentioning.

                   

                   * "Out of the way--I'm a doctor!" "Out of the way--he's not in-network."

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