Some physicians who are not in a health plan’s network may be charging plan members fees substantially above the prevailing Medicare reimbursement for the same service, a new study has found.

"Some out-of-network providers are charging exorbitant prices – several hundred or even over a thousand percent of the Medicare reimbursement for the same service in the same area," said a report on the survey release by America’s Health Insurance Plans (AHIP).

"Recent examples: $4,500 for an office visit when Medicare would have paid $134; $14,400 for removal of a gallbladder when Medicare would have paid $656; and $40,000 for a total hip replacement when Medicare would have paid $1,558," said the report.

The survey conducted for AHIP by Dyckman & Associates reviewed claims from the 30 largest states.

The report said a physician billed a patient $6,791 for "cataract surgery with insertion of artificial lens" – more than 1100 percent of the Medicare fee of $581.

Similar examples were found in all 30 states, and there are many examples of even higher variation in charges, the report said, "even though the researchers used a conservative approach to the data that excluded outliers."

"Recently, in public policy discussions about out-of-network services, the focus has been only on how much insurers pay for these services, and the critical issue of what out-of-network physicians are charging patients has been ignored," said AHIP.

The trade association said the survey findings "should cause policymakers to closely investigate this issue, including looking carefully at how these charges compare to in-network fees, as well as fees charged for similar services in other countries."

While the issue of how much is appropriate for out-of-network physicians to charge has not been part of the health reform discussion to date, "this report demonstrates that it needs to be," AHIP said. "No mechanism exists to protect patients who seek care out-of-network from receiving bills that are unreasonable and unaffordable."

"As policymakers pursue health care reform, we encourage them to look at how much is being charged for services, particularly since higher charges don’t mean high quality of care," said AHIP President and CEO Karen Ignagni. "With the nation facing the crushing burden of rising medical costs, all stakeholders should be focusing on constructive ways to bring costs under control."

Various Out-of-Network Physician Claims Filed In The State Of Florida In 2008
CPT Code	Service Description	Amount Billed	Medicare Fee	Amount Billed as % of Medicare Fee
99215	Outpatient office visits of moderate to high severity requiring 2 out of 3: comprehensive history, comprehensive exam and high complexity medical decision-making	$4150.00	$119.75	3,466%
22612	Lower back spinal fusion	$37,000.00	$1,629.63	2,270%
47562	Laparoscopic gallbladder removal	$14,400.00	$655.89	2,195%
29881	Minimally invasive knee meniscus surgery	$10,995.00	$596.92	1,842%
99244	Outpatient office consults of moderate to high severity requiring a comprehensive history, comprehensive exam and moderate complexity medical decision-making	$3,177.48	$177.48	1,790%
43239	Upper GI endoscopic visual diagnostic exam with biopsy	$5,542.50	$319.04	1,737%
63075	Surgical removal of all/or part of the intervertebral disc including spiny growths	$25,000.00	$1,441.37	1,734%
66984	Cataract surgery with insertion of artificial lens	$10,559.61	$616.79	1,712%
27130	Total hip replacement	$18,816.00	$1,371.37	1,372%
44204	Laparoscopic partial removal of colon with surgical repair	$15,750.00	$1,394.26	1,130%

Source: America’s Health Insurance Plans, Dyckman & Associates study.

The report is available online at: www.ahipresearch.org/ValueofProviderNetworksSurvey.html.

Addresses: America’s Health Insurance Plans, 601 Pennsylvania Ave. NW, South Building, Suite 500, Washington DC 20004; (202) 778-3200, www.ahip.org. Dyckman & Associates, 1050 17th Street NW, Suite 1000, Washington DC 20036; (202) 223-4741, www.dyckmanassociates.com.

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