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The investigation by the New York Attorney General’s Office has revealed a serious flaw in the way “usual and customary fees” for out-of-network providers are determined. It turns out that there is a database (I love databases, they make everything so easy). It includes charges from all kinds of procedures and separates them into localities (because everyone knows an MRI in San Francisco will cost you more than an MRI in Bakersfield). It seems like a fair system, right, based on where you live and what you get done, your insurance will pay the average of what all the medical groups charge? There’s just one problem. The lovely database is populated with charges that they get from… insurance companies. So they don’t call up the doctor’s office and say “What do you charge?” they call up their friends the other insurance companies and say “What do you say they charge?”

It is unfairness to an nth degree. The investigation by the New York Attorney General’s office found that the numbers were lowered on purpose so that they would get out of paying their true share of the costs. Remember from my last post that balance billing was the problem that started this investigation, but this effects everyone who has health insurance. Many times, the patients themselves are responsible for the difference between what the doctor charges and what the insurance pays (I am most of the time). The health insurance companies are cheating EVERYONE. And every insurance company does it.

There is one fact that people need to understand, and it’s true for auto insurance companies as well. Insurance companies exist for one purpose and one purpose only… to make money. That is the beginning and the end of it. They want to turn a profit just like every other red-blooded American. Their profit is what they collect minus what they payout. And as good business men (and women) they are taking every opportunity to pay out as little as possible. They deny claims, they cook the numbers, and they make great use of the “fine print.”

But things will change. It is the beginning of the end for the corrupt insurance companies. UnitedHealth Group and Aetna are providing money to fund a new database. One that will be run by a nonprofit group with no interest in the outcomes. I don’t have much hope for that program either. Is the work going to be done on a volunteer basis? Are they going to make just enough money to only pay expenses and not turn a profit? If so, who is paying this group? Will this group be anonymous, or will they come home to “gifts” from insurance companies? I don’t trust nonprofit groups to be an uninterested third party. If you are not interested, if you don’t care about the cause, then why would you devote time, energy, and money into it, with nothing to gain. But at least we are trying something new, the old system certainly doesn’t work. Transparency could be a very good thing in this country.

We will see how this new system works out. Only time will tell, right? In the mean time, the New York Attorney General’s office is continuing their investigation into other insurance companies and UnitedHealth has agreed to pay $350 million to settle a lawsuit over out-of-network medical claims. I wonder who gets that money? Patients? Doctors?

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