By ROB LAMBERTS, MD
We are losing patients. Certain insurance companies are trying to “play hardball” with doctors, unwilling to negotiate with us over their outlandishly low rates. We have lost patience.
So the signs went up in the exam rooms today:
As of the start of the year, we will only accept X, Y, and Z Medicare advantage plans, and we are presently negotiating with A and B insurance companies. Please consider this when enrolling in plans.
It is highly likely we will drop one of the insurance plans altogether, and we are one of the last practices in our town to accept them.
Patients are distraught. Some of them who have seen us for years are now going to have to go elsewhere, while others that just joined our practice because their previous doctors dropped out of the plan will once again have to find a new doctor. Patients aren’t mad about this, just sad. The conversations go like this:
“So you are dropping X insurance?”
“We will if they don’t change. They are paying us significantly less than other plans.”
“That’s crazy. We just left a doctor because of the same thing. Now we have to move on.”
“Yeah, I am very sorry about that. I just want to see patients; I don’t want to do this kind of thing.”
“Well, I don’t blame you. They pay $1000 for an ER visit for an ear infection, and they won’t pay you what you charge?”
“Apparently not. They have been playing hardball with primary care docs recently. That’s why nobody is accepting it any more.”
“I don’t know what we are going to do. I hate changing doctors again.”
“Call your employer and tell them about this situation with the insurance they’ve chosen. The only way things will happen is if employers get mad at the insurance companies.”
There is no anger, just disappointment and frustration. Patients are victims of the strategy insurance companies are using to cut cost. But why cut primary care? Why low-ball the one group of doctors who don’t cost that much and who can actually save money? It makes no sense to me. It certainly doesn’t make sense to my patients.
Come December, we may be putting a similar sign up:
Due to the 23% cut in our reimbursement by Medicare, we are no longer accepting new patients and may soon be forced to drop Medicare altogether.
It’s happening in a lot of offices already. The problem is that these patients won’t have an employer to tell. These patients won’t have a choice. Medicare won’t come back to the table if there are no PCP’s. They don’t negotiate their rates.
See those clouds on the horizon? They look harmless, but they’re not. It’s a storm that will kill a lot of people if we don’t do something soon.
Rob Lamberts, MD, is a primary care physician practicing somewhere in the southeastern United States. He blogs regularly at Musings of a Distractible Mind, where this post first appeared. For some strange reason, he is often stopped by strangers on the street who mistake him for former Atlanta Braves star John Smoltz and ask “Hey, are you John Smoltz?” He is not John Smoltz. He is not a former major league baseball player. He is a primary care physician.
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For what it’s worth, the company that was the main focus of this is actually responding to our action and is offering us a better contract. They realize we are one of the few providers they have left.
“I can’t make Medicare patients pay cash if I am still accepting Medicare payments”
Rob, look closely at going non-participating. You’re allowed to charge a little more, the patient pays the allowed amount in full at the time of service and then is reimbursed, and your cash flow improves.
What are you missing here, Dr Lamberts? This health care deform legislation gives insurers and pharma big breaks, continues to collude with these defenders commenting here as alleged experts that physicians are a prime cause to the health care debacle as is, and people just want to pontificate over numbers and business principles to just murky the waters of patient-physician relationships. And you all want to be civil and respectful when the profession of medicine is beyond being trashed, but being stabbed in the back by fellow colleagues and professionals who do not have equivalent training to what we commit to?
Hey, unbiased and objective readers, physicians are going to be screwed first when this legislation takes hold of their gonads, then patients will find out they are next in line, and then insurers and pharma will start to see that they will be thrown to the lions by both parties in Washington. Forget about the impacts on businesses, this has already come to light and being savaged by the defenders! Scapegoating, the American way these past several decades, now exemplified by the wretched incumbents these past 10 years.
And you all want to be nice, keep the talk civil and respectable. Go to Paul Levy’s last post here and read my last comment at that thread re what Lundberg wrote in his introduction to “Severed Trust”. It may have been written 10 years ago, but it reads like he was living the issues now.
I look forward to a Republican Legislative Branch come January, not because I like the party, but right now I despise what absolute power has done to the Democraps.
And Obama’s campaigning these last two weeks are defining for me: Hope I can change your lives for the better of me and my party, or if you are not with us, you are against us and must be eliminated.
Bush the third!
1. The vast majority of insurers put in their contracts that doctors may not reveal the fees that have been negociated. This leads to situations like we see in Massachusetts, where some docs (those affiliated with large institutions) are paid twice as much as others for the same service, due to market share and reputation.
2. The assumed prohibition on doctors revealing their “non-negociated” charges seems to be a remnant of the days when insurance companies paid the doc her full fee without any discount. Of course, at that time the insurers didn’t want docs comparing fees. Whether this still has any legal significance is unclear to me.
Rob, I have been to a Minute Clinic once when I was in a hurry to get a vaccine. They accepted my insurance and I only had to pay the insurance co-pay of $15 (I think the list price was $30-40). Insurance-wise, it was just like any normal visit to an in-network physician’s office (it was just cheaper for my insurance).
The reason these clinics post their prices is because they are very competitive, specially for those without insurance. I’m not sure a conventional medical practice with higher prices would be as motivated to post prices.
As to dropping insurance, I can say that from a patient’s perspective, I usually don’t want to go to a practice that is out-of-network unless I have no other choice. To me that would mean losing the protection that the insurance company offers to its customers. The majority of providers I have dealt with in the past have been fair and ethical, but I’ve met a few physicians and hospitals that have charged for things that shouldn’t have been charged, or charged too much, or billed for things of which I had no prior knowledge. A few of these have tried to balance bill me for charges that went beyond what was in the EoB. Eventually they desist when the insurer intervenes.
Unless I have very good confidence in the amount of future charges (and perhaps this is possible for primary care), I would be very hesitant to start a medical procedure without insurance protection. I know both doctors and patients hate insurance companies, but they do fulfill a necessary role.
You are right on this one, Rob. Posting your fee schedule (i.e. the fixed amount that you bill all payers, but never get actually paid by any of them), is useless to customers and may even hurt your business.
A prospective patient with a high deductible would want to know how much he has to pay out of pocket, and that is not your published fee. It is your contractual fee, which is of course lower, but you cannot disclose that amount and the patient may very well misunderstand.
Here is where insurers are shooting themselves in the foot. On one hand they would prefer members to seek lower cost care, and on the other they prohibit accurate cost information from reaching the member.
If I were a payer, I wouldn’t worry so much about the collusive power of a few PCPs and post on MY website true pricing (my contractuals) for every single doctor on my network and share the savings with the member in the form of rebates. Of course some quality measure would be nice too, or at least an assurance that network providers were screened by the payer.
Seeing that most everybody has high deductible plans nowadays, I bet this would put enough pressure on providers to counteract all collusion concerns.
I agree with Paolo, that this is a nice heated discussion without rancor. I appreciate that from all.
For me, the contractual obligations are there – I can’t tell others what I am being paid by a managed care contract. I can’t share my contracts. That would simply make me in breech of contract. That is not a big concern for me. Medicare payment schedules are published openly, so sharing what I am paid by the public plans is also not a big issue.
I think that the possible difference between me and the minute clinics is the fact that I am in organizations that negotiate contracts for me. When I am in an IPA, PHO, or other organization where I am teamed up with other doctors on a “panel,” if I share my charges in a way that those physicians can see, I risk antitrust. If I was playing on my own like the Minute Clinics can, I wouldn’t have to worry about that. The hospitals don’t negotiate as groups, so sharing their prices would not take on risk (I think someone pointed out that they are required to do so).
The bigger question is: why? Why would/should a doctor like me put up my fees and would it help or hurt? In the current environment, with multiple contracts with payments ranging wildly on a single procedure from payor to payor, putting up my fees up front would not help me at all. There would be no benefit to me at all. If, however, I was accepting cash payment up front and then filing insurance as a courtesy so the patient could be paid back (ala Minute Clinic), it may be smart. Minute clinics post charges because they compete on price. The amount of work I have to put in to tear money I have earned out of the payors’ hands forces me to charge as much as I can to recoup what I can. If, however, I receive my payment at the time of the visit and the patient is the one who has to deal with the insurers, then I can compete on price. I honestly wouldn’t mind that, because I think my quality is high enough that I wouldn’t have to price like the “Dollar General” store to get business.
re. the sabbatical from payment, I am fairly sure that I can see insured patients if they choose to pay me above and beyond (not involving the insurance at all). I think even Medicare patients can do that, but only if I drop Medicare altogether. The rubs are: 1. I can’t make Medicare patients pay cash if I am still accepting Medicare payments, and 2. Once off Medicare, I can’t get back on the rolls for 2 years. I can’t just drop Medicare, regret it, and then rejoin. We had a physician in our practice in this very situation.
Nate- Your weak arguments have fallen the deaf ears of the people who try to work under the crushing collusive power of the insurance carriers.
Let me ask you this. Why did Sen Nelson wait until the very last minute to give Reid the 60th vote for PPACA in Senate and he did so with just one ultimatum…that all health insurance carrier anti-trust exemptions must be protected in the bill. Coincidentally he was an HMO exec before becoming a Senator. The 60th Dem, who used to be an HMO exec, put his entire party on the plank over shark infested waters for one thing and only one thing…no repeal of the anti-trust exemption. Once Reid caved on that point, and that point alone, he got his 60th Dem vote. This is not their Holy Grail? What planet are you on?
The only price fixing I see is by the government. It is said price fixing that causes inflation. It is a bipartisan failure to learn from the history of the price fix on all Americans in the 1970s.
“Peter your confusing Medicare and Private Insurance. Private Insurance can’t prohibit a doctor from treating anyone or accepting any payment arrangement if they don’t have a PPO contract or some contractual relationship.”
But Rob does have a contractual agreement with the insurance carriers. Ask him, and ask him to read it. My information was gotten from the local doc here that only accepts cash. He had to take a 2 year sabbatical before setting up his cash business in order to satisfy his existing insurance contracts.
First of all, congratulations to Rob and others for the many good comments on this thread that are informative and that reflect different point of views in a fair manner. Nice to see most posts stay away from politics and personal attacks.
On the subject of price disclosure, the reason that most medical providers hide their prices is simply because they can. If Jiffy Lube could sell services without posting prices they would do it. But if they did it, they would lose all their customers. This is not the case with physicians and hospitals.
Every action involves risk, from crossing the street to opening a business. Posting prices creates risk for physicians (at the very least they lose a very good defensive weapon to fight collusion charges). At the same time, there seems to be very little benefit for the physician to post prices. Would Dr. Lamberts attract more patients if his prices were posted? I imagine the answer is probably no or not much. The economic cost/benefit analysis leads to most providers hiding their prices.
The solution to the problem is not to repeal anti-trust laws, but for the federal or state legislatures/regulators to mandate price disclosure, while providing safe-harbor for doing so. I completely agree with Barry on this point.
After 2011, restaurant chains will be forced by law to post the calories for the items they sell. They would have never done this on their own. Publicly-traded corporations would never disclose 10Ks to the public if it weren’t required by the SEC. A similar law will be required to bring forward price transparency in medicine. Transparency and disclosure of information always helps the market work better.
DrWonderful, you have a number of factual misconceptions in your comment. First HMO market pentration at its best was around 25%, that means 75% of the market doesn’t even have the evil HMO contract your blaming everything on.
“There is a reason why premiums, co-pays, deductibles, and denial rates climb each year but doctors fee do not.”
Premiums are a product of loss ratio, if what you insinuate was even partially true then profit margins would be increasing as well, and they have not. Co-pays, deductibles, and patient cost sharing are a product of the employers insurance contract not the providers participation contract. Employers or individuals pick what their co-pays and deductibles are.
“Their anti-trust exemption is their Holy Grail.”
Ever time a liberal throws this out there I give them a simple challenge and not one has ever answered it. Leaving your theory of explotation behind cite even one example of how HMOs benefit from this presumed anti-trust exemption. While the law allows it pratically it is illrelavent. Insurers don’t sit in a room and set prices, it just doesn’t happen.
“One wrinkle as to how insurance restricts the market is if Rob did opt for a cash business he would not be allowed to see his former insurance clients as cash customers.”
Peter your confusing Medicare and Private Insurance. Private Insurance can’t prohibit a doctor from treating anyone or accepting any payment arrangement if they don’t have a PPO contract or some contractual relationship. If a doctor goes cash only they are basically tearing up their insurance agreements and thus free to do whatever they want. The patient might suffer some financial penalty but that is a different story.
Hospital price collusion is treated differently then physician. I have this problem at work all the time, someone will ask if something is eligible under the flex plan and when we say no they want to see the specific code that says that. Or they want to set up a plan or procedure and we tell them they can’t and they expect it to be clearly written out. There is written law and defacto law, sure that is not the proper name, my legal education consist of one semester business law in high school.
Here are some good starting points to understand how convoluted this all is and why the problem is what it is;
http://oig.hhs.gov/fraud/docs/safeharborregulations/safefs.htm
http://www.healthlaw-blog.com/
This is why the Rob’s don’t take chances, look at the penalities;
“Overview: On the books since 1972, the federal anti-kickback law’s main purpose is to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions. Straightforward but broad, the law states that anyone who knowingly and willfully receives or pays anything of value to influence the referral of federal health care program business, including Medicare and Medicaid, can be held accountable for a felony. Violations of the law are punishable by up to five years in prison, criminal fines up to $25,000, administrative civil money penalties up to $50,000, and exclusion from participation in federal health care programs.”
http://www.healthlaw-blog.com/category/antitrust-health-care/
“Under the federal antitrust laws, agreements between competing providers regarding pricing of services or collaborative efforts regarding negotiation of fees constitute per se illegal price fixing.”
How do you prove beyond doubt when you both published your fees that you didn’t do it in collaboration? Remember if you can’t prove it you go to jail and pay millions in fines and can’t treat 50% of the population again.
http://www.physiciansnews.com/law/301lebowitz.html
“The Frankford surgeons have stated that each physician or physician group decided on its own not to renew its surgery malpractice insurance. The question is whether such actions may be taken collectively—by a group of unaffiliated doctors acting together under a common plan. The short answer is no, they can’t. But this is a complex legal issue with many gray areas that provide some opportunity for physicians to act.
The reason that pure collective action would be improper is that it could violate the federal antitrust laws. Although the antitrust laws seem more suited to breaking up Microsoft than preventing two doctors from discussing their insurance costs, at least from the government’s viewpoint, there is a relationship between health care professionals and the antitrust regulatory system.
The antitrust laws have existed since 1890 and are designed to protect competition. These laws rely on the fundamental principle that genuine competition in the marketplace will yield better products or services and lower prices. The theory is that, if free competition is preserved, competitors will improve their products or services and lower their prices to attract customers from competing businesses.
There are two basic antitrust provisions: First, a prohibition on monopolies or monopolization—the “anti-trust” aspect that gives this body of law its name (this is the provision used to go against Microsoft); and second, a prohibition on contracts, conspiracies or agreements that unreasonably restrain trade or limit competition. Physicians jointly discussing their insurance costs would arguably fall within this second aspect of the antitrust laws. This provision, Section 1 of the Sherman Act, only is concerned with collective conduct. Thus, conduct that when done by an individual is perfectly lawful may not be when done with others.”
I don’t know how to bold or underline so let me repeat the last part;
“Thus, conduct that when done by an individual is perfectly lawful may not be when done with others.”
“Sermo (http://www.sermo.com), the world’s largest online community for physicians, today announced its weekly hot topic. More than 500 physicians participated in a Sermo post “FTC – Refusal to accept Medicare pricing = Price Fixing.” The discussion focuses on a complaint from the FTC that the Roaring Fork Valley Physicians IPA, by refusing to accept Medicare price controls, violated anti-trust laws. The announcement prompted strong reaction among many physicians who argue they should be able to accept or decline payment terms, like any other profession.”
“In addition to government enforcement, the antitrust laws provide for private suits by parties injured in their business or property by wrongful conduct. Successful plaintiffs automatically recover treble damages — three dollars for every dollar of damages proven, plus reasonable attorneys’ fees. The cost of violating the antitrust laws can be very, very high.”
Doctors are typically restricted from posting fee schedules per the HMO contracts that they sign. Those fees are considered the property of the carrier and docs accept all these terms when they sign the contract. Any doctors who posts them in public view, either in the office or on their web site, is not only in violation of most HMO contracts but borders on an anti-trust violation whereas they may be accused of “signaling” to their colleagues what an acceptable fee or market might be.
Most HMO contracts prohibit docs from even discussing the fees, co-pays, or even terms of the contracts with the patient. Anti-trust laws prohibit doctors from discussing fees amongst themselves.
Meanwhile the HMO’s are exempt from anti-trust which allows them to collude and price fix on premiums and fee schedules. There is a reason why premiums, co-pays, deductibles, and denial rates climb each year but doctors fee do not. It’s because the HMO’s can band together to make it so. Their anti-trust exemption is their Holy Grail.
You experts better learn what it’s like from the doctors perspective because based on this thread you’re just not getting it.
So does everyone thinking posting prices (market forces) will lower PCP charges? Does Rob really need another mechanism to lower his revenue? Would posting prices lower his costs? Do his patients really want to drive around town looking for a doc based on price, or do they want to be treated by Rob? This is the lunacy of this system. Rob wants to spend his time treating patients, not participate in auto dealer like marketing gimmicks. In single-pay Rob would negotiate through his PCP association to get fair compensation for his services, and the single payer could reduce specialist and hospital charges to provide more money for PCPs, keeping total system costs in check. Rob’s patients wouldn’t need prices posted, Rob wouldn’t need to drop one insurance carrier for another just to keep his head above water and harm his patients in the process. Rob could plan his future a lot better.
Neither insurance carriers nor these walk in clinics give a hoot about the patient. It is about making money, ONLY.
It is about siphoning greenbacks from the Piggy Bank of America.
Furthermore, when someone is feeling rotten sick, they are not about to check prices…but Nate is correct.
One wrinkle as to how insurance restricts the market is if Rob did opt for a cash business he would not be allowed to see his former insurance clients as cash customers. The insurance industry considers those people as their clients, not the doc’s. Rob would have to wait 2 years before being able to draw income from former insurance pay clients.
That’s very interesting Nate, but I’m still not sure I understand. In addition to Margalit’s point about Minute Clinics, many states now REQUIRE hospitals to post at least their chargemaster rates (CA being one) while several others require disclosure of the contract reimbursement rates with at least their largest insurer plus Medicare for their top 30-50 inpatient and outpatient procedures based on revenues.
Moreover, Charlie Baker, the former CEO of Harvard-Pilgrim Healthcare, and current Republican candidate for Massachusetts governor, believes that every price should be disclosed. Suppose he wins his race and pushes that belief through the MA legislature. Is the FTC suddenly going to come in and sue all the doctors but not the hospitals because hospitals have money to defend themselves?
I appreciate your point about uncertainty and the notion of “defensive business.” Since health insurance in particular, though, is largely regulated at the state level, the FTC should presumably respect state legislative action in this area if a state or two or three decide to outlaw confidentiality agreements as they relate to medical price disclosure by hospitals, doctors, device manufacturers and other providers.
Rob, I am not saying any such thing.
All this shows is that some privately owned health care providers are publicly posting their charges. Others, as you say, are not. I understand that you are bound by anti-trust laws. I am also very puzzled by this particular interpretation of anti-trust. Please understand that I do not doubt your reality. I just don’t understand it.
Anti-trust is there to prevent collusion for the purpose of extracting higher payments. I can see how non disclosure of contract amounts may be needed for this purpose. But I have no shred of understanding how publishing one’s charges can contribute to such collusion. So if someone is making you keep your charges “secret”, that someone is horrifically dumb.
I have a funny feeling that Nate is going to spell out for me exactly who that “someone” is…
Margalit: What is your point? Are you saying my reality is trumped by your research?? Really, you have to have guts to say that I don’t know what my own experience is?? There are obviously other reasons that urgent care centers can do it and we cannot, but come on! Antitrust laws are plain and all of my meetings, all of those lawyers, the whole “messenger model” of negotiation – they are all real things. You are saying we are doing it on bad information?? Because you did some research on it??
Sigh. That is the problem with academics. If you make a mistake, you say “oops.” If I make a mistake, I get a big fine or a subpoena on my desk. This a constant subject of discussion in the real world. We’ve been talking about it for 10 years. Now you are saying by your searches on the web, we are wrong?
Better look again, Nate.
http://www.99wurgentcare.com/services-and-fees/
http://www.doctors-on-demand-online.com/price_list.html
http://www.pineaveurgentcare.com/procedures.htm
http://www.psalmsurgentcare.com/index.php?p=1_5_Price-List
I could go on, but you get the idea….
1) Minute Clinic can drop a million or two on attorney’s and not even notice it.
2) The only Urgent Care I have seen post their fees are chain owned, if you look at the independent provider owned I have never seen them do it
3) Who would the FTC accuse them of colluding with? If Minute and Take Care are undercutting each other and the rest of the market that is a pretty strong defence against collusion to raise prices. I don’t see PCPs reducing their cost if they published their rates.
The reason this is a problem is not becuase there is a law that says you can do X but not Y. Like most problems created by the government it is the uncertainity that makes it so dangerous. Providers have no safe harbor within to operate. Minute clinic is in much better position to take those risk. A pratice like Rob’s can’t afford to defend themselves even if they did no wrong. Call it defensive business.
I think self funded plans can and should be allowed to captitate doctors without an HMO license. As right as I may be I don’t have the millions to prove it in court. It cost the sate nothing to issue a cease and disist and me a fortune to just produce records they request.
If it is illegal to post fee schedules (charges), how come every Urgent Care and Minute Clinic posts their fee schedule, even those that accept insurance? Out there on the web for everyone to see….
“I resent having high-paid specialists, drug companies, and insurance companies making way more than me and cutting me back to “save the system money.”
I do too.
But it is not the specialists who cut you back as much as it is the well connected lobbyists for pharma, device makers, PBMs, and now, for the new player in the game, ie the $ multi billion HIT vendor who claims to improve your efficiency and provides boiler plate to bill at the max, but is really sucking more money out of your pockets.
Sorry, Nate. People with money tend to want to keep it and will try to get the government to allow them to keep it. Even doctors. My frustration is not simply that my salary is going down, it is that the system is going to hurt patients and is dying because of out of control spending. My bills are not the reason for that. My job is to keep people out of the hospital and keep them healthy. I resent having high-paid specialists, drug companies, and insurance companies making way more than me and cutting me back to “save the system money.”
“Just check and see who has the most money, and I suspect you will find the most villainy.”
I’m prospectivly insulted by this Rob. Someday I am going to be filthy rich and not at all villainy. At least I hadn’t planned to, now I just might buy legislation to make your life miserable for saying that. See its the doctors that make us evil.
Who was truly evil..Frankenstein or the doctor that made him??????
“I suspect that the largest carriers would not be interested in any of these approaches”
They would not be interested but even at our size we can force their hand on some things. For example, Anthem hates what I do under their High Deductible plans and every month says they are going to put an end to it. In Ohio there are enough other carriers selling them that if Anthem did follow through I could move enough business it would hurt them. They tolerate me because they have to.
I was at a large brokers office pitching a website we are starting to work with that allows members to compare providers based on net PPO allowable. The brokers in the office that do smaller groups with me loved it and called in the big shots that do large group. They also loved the concept, to my dismay all they cared about was rather the site was going to work with Anthem and United. If Anthem ignores it, and the brokers wake up and see I’m a better option to start with, they might actually move some large cases to me, again forcing Anthem’s hand.
One of the reasons price took off like it did was politicians killed the self funded market for 5-7 years. This gave fully insured carriers free reign. Now that self funding has returned the carriers are under tremendous price and innovation pressure. I can come up with or steal a good idea and have it on the street in two months. That’s nearly impossible for BUCA to respond to. Most of our problems are easily fixed we just need 3-4 years of Washington sitting out to do it.
“cost of operating their administrative infrastructure is probably considerably higher than yours and other TPA firms.”
My admin fees are usually half theirs.
“Their strengths relate to their ability to leverage their size to negotiate better discounts from providers,”
Not any more, hospital CEOs are finally realizing they F’d up bad letting BUCA get 70-90 market share. In a number of Metro areas they are giving higher discounts to regional or other PPOs specifically to prop them up and take business from BUCA. I have other tricks that can negate any discount advantage they have.
“they can more easily afford investments in information technology as technology and scale become ever more important in the healthcare and health insurance markets,”
I would disagree with this. The software I use is also used by 200 other TPAs and payors. Not only is that 200 firms sharing the tab but more importantly innovating. At our annual conference every year I always learn of new things some other TPA is doing in some other part of the country. Every year someone new is entering the game as well. Investors are always willing to risk their money if there is a potential huge payoff at the end. For example I know of 2-3 software companies pushing a system that pays the provider at time of service. They call it a real time payment system. I don’t like the concept but we’ll know in a year or two if it works. This was thought up, coded, and on the street quicker then BUCA could schedule a meeting.
The politicians are pushing scale, my opinion like they said in early 1970s they want a small handful of federally regulated insurers they can regulate to take all the blame for rationing and price controls. Every year they pass more and more laws making it hard for small players to survive. It is without question in the best interest of everyone but the politicians that we have a competitive and innovative market of thousands of players but we’ll see, time will tell who wins.
“Now, docs don’t do a 5X Medicare charge”
Hospitals do 5 times Medicare all day long, doctors hardly ever. Think about what you’re saying and think it through. If a doctor charges 5 times Medicare and most evil insurance companies pay Medicare or only slightly more than you’re saying PPO discounts are equal to 80%! No PPO is claiming 80% discounts. An average PPO is in the 20s strong PPOs are in the 40s and top out in the 50s but that is very rare. And that is average over all services including the overpriced hospital.
“To go to businesses and negotiate risks the insurers pulling away from the table.”
And if they do? Are you saying you would miss BUCA(Blues, United, Cigna, Aetna) telling you how to do your job and underpaying you for it? Careful how I say this, but you’re exhibiting battered spouse syndrome. They whoop your ass, have no intention of stopping whooping your ass, and you still don’t want to leave them.
What does BUCA do that we need them for? TPAs can process the paper. There are 100s of reinsurers to take the risk. I assume you doctors could step up and manage the care. Step back and imagine a world without BUCA, what are we missing?
If you do this in conjunction with the employers what is the carrier going to do? Cancel the employer? Ok so what, they go to the Alt Risk market and pay less for better service.
“It sounds easy in a comment on a blog post, but in reality, it is very risky and very difficult.”
We have been doing it for 20 years. Nothing being suggested hasn’t been done before and done successfully. I’ll agree it is outside the box and time consuming but I wouldn’t say risky or difficult. If anyone is assuming risk it’s the employers and they are begging you to give them the chance to do it.
I expect this out of Margalit or Maggie, I internet studied for three hours before naming myself an expert, Maher but come on Barry. First page of Yahoo search;
“The Feds are cracking down against “price-fixing” by doctors. The Federal Trade Commission is stepping up its scrutiny of possible antitrust abuses, and it’s setting its sights not only on hospitals and pharmaceutical companies, but on physician practices.”
http://medicaleconomics.modernmedicine.com/memag/article/articleDetail.jsp?id=112447
It would be very near impossible to publish your rates openly and not get anti-trust attention. Otherwise doctors could easily circumvent the rules by claiming they are publishing it for the public and it was pure coincidence all the cheap doctors raised their prices.
“For your statement to be correct defies common sense.”
Is this an argument for or against Rob being right? The fact the law doesn’t make sense should be all the more indication it is real.
“As I said previously, if the law or the regulations need to be changed, then let’s work to change them.”
You will have your chance Tuesday to start. Throw out every Democrat you can and elect as many tea party approved candidates as you can. Then when we toss Obama out we can start repealing 45 years of terrible insurance/health care laws.
“It seems crazy to me because it is. How is it that airlines and hotels have no problem posting their prices and competing like crazy without anyone accusing them of collusion? The same is true for every other part of the economy except for healthcare.”
The government hasn’t sold trillions of dollars of airline tickets for travel 100 times more expensive then what it charged. Washington spends a trillion a year on healthcare and has 34 trillion in unfunded healthcare promises. They have a vested interest in healthcare matched only in their vested interest in pensions.
“You just put it out there without speaking with any other doctors or reaching any agreements with them. What would be the practical effect?”
Hi Barry this is Agent X and Y from the FTC, we’ll be closing your practice, fining you millions more then you ever made, and dragging you through federal court hell for the next ten years of your life.
“My reading of the article that you linked to suggests that there is a considerable difference between “discussing” fees with a competitor with the intent of reaching an agreement on fee levels and just posting fees to inform patients.”
There is considerable difference between buying a quarter pound of weed to sell and buying it in bulk for personal use for a cheaper price. Either way your charged with trafficking. You never want to go to court with your freedom dependent on proving intent. I can give you 100 examples of poorly written healthcare law that makes no sense. I.e. under COBRA why if the HR department misfiles a change of address and sends a COBRA letter to the wrong address are they liable for $50 a day in fines forever and the person’s COBRA rights extend forever till they do mail a letter to the right address? Does it make sense small business are put out of business for an honest human clerical error? I.e. 2.0, if a doctor sends me the wrong name with their TIN does it make sense the government fines me $50?
I am willing to share the wealth. I think we PCP’s have more victim than villain in them. We don’t have any power here. Just check and see who has the most money, and I suspect you will find the most villainy.
Rob – This is a fascinating (at least to me) discussion. I wonder how the lawyers feel about the price disclosure issue. It seems to me that since insurers are so uniformly hated by Democrats, the recent reform legislation could have done a lot more to bring about price transparency, including disclosure of both contract rates and list prices, instead of spending so much energy on minimum medical loss ratio rules where natural competition would have dealt with that issue quite well. I can’t help but think that doctors overall support the current system as it relates to rate disclosure while the Obama Administration didn’t feel that it could take them on or the hospitals for that matter so they cut deals with both groups to gain their support for PPACA. So, who is the villain here? Is it the insurers, the lawyers, the doctors and hospitals, the regulators or some combination of all five?
Yes, it is crazy. Most of the articles you read will say that small practices should be allowed to disclose rates. Most are not even opposed to collective bargaining, as doctors are severely disadvantaged with the current system. I repeat: if I post my rates where a “competitor” can see them (on the web or even put it on a sheet that is handed out to patients), it breaks antitrust laws. When I am in my IPA meetings, this is discussed all the time. We often have a lawyer on the phone when the guy we hired to negotiate for us is speaking. He cannot disclose rates or discuss anything close to that. We must send him our acceptable rates which he MAY NOT SHARE with other practices and then come up with a fee schedule offer by the insurance company. Then he is not allowed to approve or deny it, nor is he allowed to influence us one way or the other. He must send the rate to us and have each group decide separately (without discussion) on whether they accept or reject. This is what is known as the “messenger model” and is the only way non-integrated groups can negotiate. We may not EVER disclose our rates to our competitors. We will know what they are being paid by an insurance company who we both accept, but our discussion must be highly guarded on those lines. I have been in a number of groups like this and antitrust is always one of the main things that guides our discussion. We are threatened by hospitals and insurance companies if they think we are discussing things we should not discuss. Do you really think insurers are going to sit back and let the law be loosely enforced? No, they are at a huge advantage in this circumstance (a fact that the lobbyists no doubt are aware of) and would never want to have laws changed in this area. It is insane and bad for America.
Welcome to my world.
Rob – It seems crazy to me because it is. How is it that airlines and hotels have no problem posting their prices and competing like crazy without anyone accusing them of collusion? The same is true for every other part of the economy except for healthcare.
As a practical matter, suppose you or any other doctor posted all of your list prices on a website. You just put it out there without speaking with any other doctors or reaching any agreements with them. What would be the practical effect? Suppose a PCP who serves a wealthy clientele in the Buckhead section of Atlanta posts his high fees. Do you really think a doctor with a practice in a poor section of Atlanta is going to suddenly raise his fees to that level? He won’t because he can’t because his market won’t bear it. My reading of the article that you linked to suggests that there is a considerable difference between “discussing” fees with a competitor with the intent of reaching an agreement on fee levels and just posting fees to inform patients. If other doctors can also view the information, what they do with it, if anything, is up to them. Even if they wanted to achieve some convergence in their collective fee structure, they probably couldn’t make it happen. Even if they could make it happen for awhile, they probably couldn’t sustain it without an enforcement mechanism. The whole system just doesn’t make any sense.
With respect to disclosure of contract rates, insurers at least have something of an argument when they claim that providers who are paid less will want to be paid more while those who are paid more won’t be willing to lower their charges. Some providers, especially in the hospital sector, have a lot more bargaining power than others. To mitigate this and create some countervailing power on the payer side, we need tiered in network insurance products so patients who insist on using high cost providers whose quality is no better than their competitors’ will have to pay more out of pocket for the privilege.
In our case, when my wife went to the hospital (under a PPO) a doctor tried to bill her – he popped his head in the room and said “hi” (never looked at her chart or asked her why she was in) and then billed us over $500 for his visit. The system is broken, but so are many unethical doctors.
I cannot post my charges. If a patient asks what X costs, we can tell them. I cannot, however, post a list of my charges on our webpage or share them in ways that other doctors could find out our fee-schedule.
Guys, I do this for a living. I live in this world. We cannot share fee schedules. It may seem crazy to you, but that is the crazy world in which I live. If I share my fee schedule with another physician who is not part of my group, it breaks antitrust laws. It amounts to collective bargaining, which is illegal for physicians.
http://www.physicianspractice.com/display/article/1462168/1587480
Google “Physicians antitrust” or “Physicians collective-bargaining” and you will see what I am talking about. If I show my charges in a way that gives access to another physician in my town, I am breaking antitrust laws.
Really, really. Honest injun.
Rob says: We cannot publish our fee schedule. That means we can’t say “we charge X for Y procedure.”
Margalit says: “By law, you have to charge the same fee for the same procedure to all patients. This charge is arbitrary. I don’t see who is stopping you from publishing it, particularly since you have to publish it upfront to cash patients.”…. “You are also allowed to publish what Medicare is paying you because Medicare publishes it anyway.”
Rob – I’m virtually certain that Margalit is right on this. For your statement to be correct defies common sense. It is well established that insurers impose confidentiality agreements that preclude you from disclosing your contract reimbursement rate but how can you not disclose your list price? As Margalit says, you presumably disclose it to new and current patients, don’t you?
As for the difference between what doctors bill and what commercial insurers and Medicare actually pay, I have a spreadsheet of every service, test and procedure that my wife and I had done going back to 1999 which, for me, includes a half dozen surgeries including CABG and a DES. I could cite lots of specific CPT-4 codes for which the billed amount was more than 3X what my insurer, Highmark BCBS, actually paid and quite a few where it disallowed the charge completely. The difference between hospital billed amounts and what was accepted as full payment from my insurer is often huge. Even for primary care, there could easily be a two or three to one difference between the lowest list price and the highest in a given area or region based on the factors I cited earlier – experience, communication skills, convenient location, practice operating efficiency, etc. If we expect patients to be more cost and price sensitive when they use healthcare, price discovery before services are rendered is critical. It’s routine everywhere else in our economy so why not here too? As I said previously, if the law or the regulations need to be changed, then let’s work to change them.
Rob, I am still not convinced. By law, you have to charge the same fee for the same procedure to all patients. This charge is arbitrary. I don’t see who is stopping you from publishing it, particularly since you have to publish it upfront to cash patients.
Perhaps you are not engaged in this practice, but I have never come across a hospital or specialist claim that did not require massive adjustment down to the allowable amount.
On the other hand, your contractuals are probably something the payers don’t want you to share with other docs. Negotiating together is not allowed unless you are an IPA or otherwise clinically integrated.
You are also allowed to publish what Medicare is paying you because Medicare publishes it anyway.
CT IPA Doc: I know you hear me because of the IPA in your name. I assume that does not refer to beer, although I won’t respect you less if it does. You are very right about the noncompetitive environment that is forced on us and forces us to eat ba