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So what’s the real usual, customary and reasonable price of care?

The Ingenix mess apparently won’t go away. Sen. Jay Rockefeller is now going after the health plans for using Ingenix’ database. Ingenix and some of its customer health plans have already settled with several states, but apparently it’s not enough. Now Rockefeller is after them. And the words are tough. “Fraud”, for one.

Now, health plans don’t exactly have much credibility. And when the politicos find out that Ingenix a) sells tools to help health plans cram down the amount they pay providers, b) sells tools to providers to extract more money from health plans, and c) is owned by the biggest (and not too long ago) baddest insurer on the block, this may get a little more interesting. After all, it’s kind of an arms dealer arming both sides.

But there is one thing that troubles me. I’m quite prepared to believe that Ingenix’s view about what was UCR was different from the local medical society’s view of what was UCR, and therefore that the plans were “under-paying” the consumers and the doctors who serve them.

But let’s remember what Usual, customary and reasonable fees are.

They’re what providers have made up over the years. It’s not as if there’s a market price for provider fees. Everyone, from my buds at Cato to the single payer crowd agree that there’s no real market for health care. After all we know that there’s huge differences in prices charged to those who are in a PPO versus the uninsured by the same providers. And price discrimination is a symptom of a failed market. And even when they’re based off Medicare’s RBRVS pricing, we know that those fees are not based in reality, but rather in politics.

So the UCR prices, which Ingenix was or wasn’t paying correctly, are just made up. So tell me why Ingenix’s made up prices were different from the made-up prices of the providers?

And for that matter why aren’t we going after doctors and hospitals that used Ingenix products to increase the amount they got paid. Weren’t they committing “fraud” against health plans and cosumers too?

And then tell me why we use this nutty system of paying doctors anyway. Oh, I remember now…

Coda: While I don’t say very much very nice about health plans, I am very impressed with Kaiser Permanente’s new campaign on disparities in health care based on race. Uninsurance in particular is very different among different races, and it’s great that KP is putting a face on it.

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Thomas CloudMark DominickTIM WDan SmithBlake Zenger Recent comment authors
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Thomas Cloud
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Thomas Cloud

This is a capitalistic society and everyone is entailed to charge what ever one including non contracted health care providers to charge whatever ts desired for the good and services that are provided, However Health care is necessary to protect the well being of society and should be provided by all civilized countries. The best plan would to create two entities a private access and governmental universal access paid for from a tax funded as has always been in place under either Medicare, Nidicaid, Medical, and recently affordable health care The usual and customary plans would be solely for the… Read more »

Mark Dominick
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That’s what irritates me the most. You could get radically different prices on medical procedures from city to city and state to site. The Healthcarebluebook helps give you the median price on a particular procedure and tells you where you can find the type of service for the cheapest. Insurance companies and hospital corporations set their own prices so its’ up to the individual to do their research.

TIM W
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TIM W

IS THERE A SITE WHERE AS DOCTORS CONTRACT WITH PROVIDERS AND OR INSURANCE. IF SO, IS IT POSSIBLE TO SEE HE CONTRACT THIS DOCTOR HAVE WITH A PROVIDER AND OR INSURANCE COMPANY TO SEE WHAT AGREEMENT THEY HAVE REGARDING PPO DISCOUNTS AND IN SOME CASES, WORK-COMP FEE SCHEDULE DISCOUNTS. IF THERE IS DATA BASE TO LOOK UP A CERTAIN DOCTOR WITH HIS CREDENTIALS SUCH AS A CONTRACT WHEREAS DISCOUNT ARE CONSIDERED AS A RESULT OF, COULD SOMEONE PLEASE SEND THE INFORMATION TO MY E-MAIL I WOULD GREATLY APPRECIATE IT. THANK YOU

Dan Smith
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Dan Smith

Full-blown competition in the healthcare field will only occur if service provider contracts between the doctors/hospitals and insurance companies are eliminated. These contracts limit access, quality, competition and raise prices. Also these contracts make it harder for new insurance providers to enter a state since these contracts are used to build the insurance companies’ service provider network. A new insurance company would lack the network and find it difficult to recruit local providers who are already fully booked by established insurance carriers. The key is to eliminate the service provider contracts and require the doctors and hospitals to accept patients… Read more »

Dan Smith
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Dan Smith

Its time to dust off an old tried and true solution to solve a problem like healthcare that the free market cannot solve. In the past when competition was not sufficient to control prices on big ticket items like the price of electricity, price of land-line phone service, and the price of natural gas service, our state governments instituted public service commissions (PSCs) to arbitrate fair pricing. We need a PSC for healthcare to set medical charge code prices billed to insurance.

Blake Zenger
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If data is power—and make no mistake, data IS power– then these data warehouses, like Ingenix, are very powerful. Although problematic, I completely understand UHC’s interest in purchasing Ingenix. In fact, they are not the only data warehouse owned by a health plan. The attraction is understandable. Traditionally, health plans have succeeded based on the efficiency of the claims processing and strengths of their provider contracts. Using data to drive business decisions and demonstrate value, particularly of care management programs, is a relatively new competency. Health plans with their finger on the pulse of the industry have needed to build… Read more »

FL PCP
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I can only guess that most of the commentators are not practicing physicians. Practically speaking, UCR price is a non-issue. As a primary pare physician (with an MBA) in a two doctor practice I can tell you that “charges” in no way reflect “payment”. In the contracts with payers, the actual reimbursement is generally a percentage of Medicare. Commercial insurers usually, but not always, pay a small amount more—let’s say 110% of Medicare rates. This rate is “take it or leave it”. I can assure you the extra $5 I receive for an average office visit does not offset the… Read more »

Tom Leith
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Tom Leith

> Thanks for the Starr book referral.
It is a great book — a little dry, Starr’s an academic.
> btw, that “noble reasons” bit was not me.
Oh, sorry.
t

John Ballard
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Tom Leith,
Thanks for the Starr book referral. A quick blog search returns a bunch of hits. When I saw Maggie Mahar’s mention of the book there was no need to look further. I will be ordering it.
Thanks, too, for your time and patience.
(btw, that “noble reasons” bit was not me.)

Tom Leith
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Tom Leith

John Ballard writes: > they don’t give it away for noble reasons You’re changing the subject. To even begin to discuss all this would be far too much for me to write here. I suggest Paul Starr’s book “The Social Transformation of American Medicine”. You can get it for less than $10 including shipping through ABEBooks.com. > The system in place IS. NOT. WORKING. No it isn’t, not anymore. The old social bargain is collapsing and we’re in the throes of working out a new one. It is not easy: “There is nothing more difficult to take in hand, more… Read more »

John Ballard
Guest

Clearly, spending too many years in a plain old business has left me with an understanding of accounting way too primitive for this forum. Physicians and hospitals are rational monopolists with charity in their hearts. Something wrong with that image. One of my neighbors with no insurance tell me that the few times he has sought medical attention he negotiated a favorable price up front by paying cash, thus avoiding the “usual and customary charges” and the price of insurance at the same. Four men I know are eligible for VA benefits and are very satisfied with their “government insurance.”… Read more »

Peter
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Peter

“Then the dirty dogs turn `round and give away free care just like what you paid good money for.” Tom, they don’t give it away for noble reasons, or willingly because of charitable inclinations – they do it by force of law and then use the courts/collection agencies to collect it. The minimum (charitable) consideration for someone uninsured would be to at least charge them what the hospital has already determined to be “usual, customary and reasonable” – but no, these “dirty dogs” up charge the most vulnerable 3-4 times above standard charges. Sounds more like the attitude of a… Read more »

Tom Leith
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Tom Leith

John Ballard writes: > I’m sure glad the billing didn’t have to be padded. Let’s see… Didn’t you tell us all the other day > As for profits, I’m all in favor of profits. > Whatever the market will bear, I say. I want > surgeons to have vacation homes and yard men. > I want RN’s to take their spouses out to eat at > expensive restaurants at least once a week. I > want housekeepers to have well-funded benefits > including PTO and generous matching of retirement > plans. Hell, I want so much profit to flow to… Read more »

John Ballard
Guest

Thanks for that summary. I see now how it works.
Some kinda way it just gets cleared up.
I’m sure glad the billing didn’t have to be padded.

Tom Leith
Guest
Tom Leith

John Ballard writes:
> No one has explained to me where the money
> comes from to pay the actual expenses of the
> thousands of uninsured patients who get treated
> and walk away, or who are insured but have claims
> denied, or declare personal bankruptcy because of
> horrendous medical bills.
Oh, come on!
It comes from those who did pay their bills (or a portion of them), from gifts to the hospital (usually a hospital), from the self-sacrifice of doctors, nurses, and staff (including administrators), and from tax-free status (most of the time). This is not a mystery.
t