TUESDAY, Jan. 17, 2017 (HealthDay News) — Patients using specialists outside their health-plan network often receive surprise bills for services that cost far more than what Medicare considers a fair rate, a new study suggests.
Most insurers use rates set by Medicare — the publicly funded insurance program for the elderly — as the benchmark for what they’ll pay health care providers.
But a look at 400,000 U.S. physicians’ charges found many doctors bill their private-paying patients two, three, even six times more than what Medicare pays for the same services, the study revealed.
The highest markups — four or more times greater than the Medicare rate — were for certain specialty services, including anesthesiology, interventional radiology, emergency medicine and pathology.
Anesthesiologists had the highest markup, charging six times what Medicare considers a reasonable amount, the researchers found.
These “excess charges” can overwhelm people who don’t get a discount on physicians’ full charges, including uninsured Americans and privately insured patients who use “out-of-network” physicians, the study authors noted.
Senior author Gerard Anderson is a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health in Baltimore.
He said consumers rarely have an opportunity to select certain doctors, such as those who administers anesthesia or provide emergency treatment. And if these doctors happen to be out of network, the charges can really add up.
“You have a surgery, you never choose your anesthesiologist, and your anesthesiologist is out of network and sends you a bill. Medicare would have paid $1,000, and you get a bill for $6,000,” Anderson explained.
But critics of the study say it grossly misrepresents the situation by suggesting that Medicare rates are a reasonable benchmark.
“My overall reaction is, I just shake my head,” said Dr. Jeffrey Plagenhoef, president of the American Society of Anesthesiologists. He cited a 2007 General Accountability Office report showing Medicare pays anesthesiologists just 33 percent of the average commercial insurance payment rate.
Medicare “devalues anesthesia services,” paying lower rates than other specialties,” he said.
“The root of the problem is not a surprise bill. That is a consequence of the problem,” added Plagenhoef, a Waco, Texas, anesthesiologist. “The real problem is gaps in insurance coverage.”
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