While the Affordable Care Act has brought transparency for consumers to compare health insurance plans, it has failed to lift the veil of secrecy surrounding how much health care services actually cost. This is particularly important for consumers who have high deductible PPO Bronze plans who would like to learn the health plan’s negotiated rate for a health care procedure. Similarly, consumers in PPO plans who must go out-of-network have trouble finding the allowable amount of a health care procedure that the health plan will pay.
Negotiated Rates are confidential
Health insurance companies negotiate the rates in which they will reimburse to providers for health care services rendered to their members. The negotiated rates in the contract between the health insurance company and the provider are secret and confidential. Until you receive an invoice for the service from the doctor, hospital, or lab, neither the health plan nor the provider can reveal that actual reimbursement rate. While most health insurance companies now have health care cost estimators, many people have indicated that the estimated cost range is too large to be of any use or just plain wrong when they contact the provider.
Consumers need to know the true costs
For consumers with a high deductible Bronze plan that has either a $4,500 or $6,000 deductible it is important to obtain an accurate estimate for outpatient services. Theoretically, the negotiated rate of the health plan should be lower than the retail cost of the procedure without using health insurance. But if the consumer uses health care services outside of their health plan, those costs don’t accrue to meeting the maximum out-of-pocket amount.
Consumer fights to learn cost of Home Sleep Apnea Test
I have one client that simply wanted to know the amount she would have to pay under her Covered California Bronze plan for a home sleep apnea test. She could easily get the physician’s retail cost for the test, but not the actual cost she would pay using her health insurance. She provided detailed information to her health insurance company including the doctor’s name, his National Provider Identifier number, the name of the hospital with their tax ID number, and the specific Current Procedural Terminology billing code.
Provider Confidentiality Agreement
After a month of emails where the health insurance company kept directing her to their cost estimator tool, OR to call the member services phone number, OR telling her to have her doctor request an estimate, she finally hit the brick wall of secrecy. The last reply from the health insurance company’s customer service represented stated,
As I had mentioned in my previous email dated 01/14/2016 we cannot & will not disclose any participating provider’s contract rates with members. There is a Provider Confidentiality Agreement that will not be violated. A Provider may disclose his negotiated rates to you directly, If they choose to do so it is at their discretion.
Anthem Blue Cross in their Evidence of Coverage for their Bronze PPO plans outlines how they contract with their network of providers.
How Your Coverage Works
This is a Preferred Provider Organization (PPO) Plan. We provide access to a network of Hospitals and Providers who contract with Anthem to facilitate services to our Members and who provide services at pre-negotiated discounted rates. Benefits for In Network Providers are based on a Maximum Allowed Amount. In Network Providers have an agreement in effect with Anthem and have agreed to accept the Maximum Allowed Amount as payment in full. An In Network Provider may, after notice from us, be subject to a reduced Maximum Allowed Amount in the event the In Network Provider fails to make routine referrals to In Network Providers, except as otherwise allowed (such as for Medical Emergency Services).
The Blue Shield Bronze PPO EOC states,
Participating Providers agree to accept Blue Shield’s payment, plus Member’s payment of any applicable Deductibles, Copayments, and Coinsurance or amounts in excess of specified Benefit maximums as payment-in-full for Covered Services, except as provided under the Exception for Other Coverage and the Reductions-Third Party Liability sections. This is not true of Non-Participating Providers.
Why these “pre-negotiated discounted rates” can’t be made available to the member is a mystery to me. But the confidentiality of these rates is also the false premise upon which supporters of Consumer Directed Health Plans (CDHP) often cite. The rationale for expanding CDHPs is that competition will drive health care rates down. If the majority of consumers had high deductible health plans then there would be serious comparison shopping between providers for sleep apnea tests or other outpatient procedures like orthoscopic knee surgery.
But consumers can’t learn the actual costs because the health plans won’t tell them the costs. So how can a consumer compare prices? Until the health plans and the providers are forced to provide the negotiated prices, consumers will always be stumbling in the dark to learn how much their health care costs if they have a PPO plan.