The vast majority of health care providers act with integrity. But not all. One provider billed Aetna $56,980 for a 25-minute hospital bedside consultation.
Imagine going to your local mechanic for a regular oil change. The shop doesn’t have prices listed on the wall, but you know the going rate is around $30. As they pull your vehicle around front, you discover some unexpected news: you have been charged $1,200. How would you feel about getting a bill that’s 373 times the average cost? Consumers expect to know the price of a product or service before they buy it. Most people, however, don’t know the cost of their health care until after it is delivered and the bill arrives.
Sometimes, the bill you receive has an unexpected price tag attached.
For example, in 2013, one member had a patch of skin removed at a New Jersey ambulatory surgery center. The federal government pays around $87 for the same procedure under Medicare, but Aetna received a bill for $32,460.
In other cases, surgery centers in California billed far more than the average Medicare charge for common procedures. These procedures led to charges that were 622 percent higher for removing an eye lesion, 338 percent higher for cleaning an ear canal and 535 percent higher for repairing an Achilles tendon.
In 2013, physicians in New Jersey billed 48 times higher than the Medicare rate for arthroscopic knee surgery and 31 times the Medicare rate for a hip replacement.
These are serious overcharges, and they are not as rare as you might think. While the vast majority of health care providers act with integrity and focus on improving the health of their patients, a small number charge exorbitant prices for the care they provide. That ultimately drives up the cost of health insurance for everyone: individuals, employers and health plans.
Members can keep costs down and be proactive by selecting doctors and hospitals that are “in network,” where a provider has a contract with the insurance company for reduced rates as well as other safeguards.
According to Ed Neugebauer, former chief litigator for Aetna, fraudulent practices are designed to produce additional profits for the provider.
“Fraud and abuse includes many different strategies on the part of some providers,” Neugebauer said. “If providers can figure out a way to perform services for a member outside of their health plan’s network, they can find a way to generate astronomical charges and fees for fairly routine services.”
Ralph Carpenter, head of Aetna’s Special Investigations Unit, explains there are a number of tactics used to abuse the system and make more money. They include:
- Billing for services that were not performed;
- Threatening to bill members if insurers don’t pay the full price tag;
- Intentionally billing for services that are not covered under the patient’s health plan;
- Misrepresenting dates, locations, and providers of services;
- Incorrectly reporting diagnoses or procedures;
- Intentionally practicing at in-network hospitals and other facilities as an out-of-network doctor;
- Enticing members to get services at an out-of-network facility by waiving coinsurance and copays; and
- Offering kickbacks and bribes to in-network doctors for referring patients to out-of-network facilities.
These are just a few examples of increasingly sophisticated schemes.
“Over the years health care fraud schemes have become more and more complex,” Carpenter said in a recent interview. “We use many tools to fight this fraud, but our collaborative efforts with our legal team and law enforcement are the key to our success. We would not be making the impact we are making without these critical resources.”
Health care fraud is more than just network confusion
Even when a provider appears to be in-network, patients still can be at risk. Neugebauer notes if patients go to the emergency department at an in-network hospital, there is a good chance the health care providers they see are not going to be in-network.
“Patients need to watch out for the uninvited guest who comes into your hospital room and then bills you and your health plan for outrageous, undisclosed amounts,” Neugebauer said. “The hospital in these circumstances is not being honest with members if it says it is in Aetna’s network but the doctors aren’t. People need to know up front.”
Aetna has been fighting some of the most egregious offenders in the courts since 2007.
In 2013 Aetna filed a lawsuit against a Texas hospital engaged in questionable billing practices. The hospital was able to entice customers to schedule services at their facilities by waiving co-pays. After the procedures were done, it sent inflated bills to Aetna. A few examples included a $99,750 bill to remove earwax, a $74,000 bill for bunion surgery, and a $139,000 bill to repair a crooked toe.
Insurance companies usually try to pay claims quickly and efficiently to avoid hassle for members and providers. This also helps companies meet regulatory requirements for turnaround times.
Keeping members out of the middle
“We create policies and processes to keep members out of the middle,” Neugebauer said. “The way we do that is to just pay what providers want to protect the members. Dishonest health care providers know Aetna does this, so they take advantage.”
Taking advantage means unnecessary costs for consumers, employers and insurers alike.
America’s Health Insurance Plans (AHIP) released a report in 2013 that showed insurers like Aetna and its members often receive bills that are 10 to 20 times higher than Medicare would pay. In extreme cases, these bills can be nearly 100 times higher.
“We are trying to get one step ahead through better health plan design, public awareness and legislation or regulation,” Neugebauer said. “The more educated people are and the more questions they ask, the better it is for everyone.”
A growing number of states are pursuing legislative solutions. Aetna is working with legislators to promote legislation that protects consumers from inflated health care charges often associated with the services of out-of-network doctors and hospitals, usually in emergency or urgent care settings. Bills addressing this problem have been enacted in Illinois for PPO plans and are pending or under study in New Jersey, Florida, Colorado, California and Georgia.
Aetna supports legislation that would prohibit out-of-network doctors and hospitals from billing patients at inflated rates, and that provides an arbitration process to resolve disputes between insurers and providers.
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Editor’s note: If you are an Aetna member and want to report suspected fraudulent activity, you can send an email to firstname.lastname@example.org