The joys of private health 'care' in the US

When Choice of a Doctor Drives Up Other Bills

By RICHARD PÉREZ-PEÑA

Published: September 11, 2006

Irene Greco knew she would have to pay from her own pocket to use the surgeon she wanted, rather than one in her insurer’s network, but she thought she knew how much the additional cost would be. She was wrong — by almost $5,000.

She had her operation at a hospital that was in Oxford Health Plans’ network. But Oxford, her insurer, says that because the surgeon was outside its network of doctors, the hospital bill as a whole would also be considered out of network, and therefore subject to less coverage.

Oxford says its coverage policy is straightforward and properly communicated to its customers. But some health care experts say this policy is so unusual that they have never seen it before, and the hospital industry calls it the latest in a string of unfair practices by Oxford and its parent company, UnitedHealth Group, that are designed to avoid paying what is owed.

The Healthcare Association of New York State, the main lobbying group for the state’s hospitals, has filed a complaint over Ms. Greco’s case with Attorney General Eliot Spitzer’s office, which is looking into the matter. The group’s leaders say they cannot recall ever making such a complaint against an insurer.

Oxford, one of the largest insurers in the metropolitan area, insists that everyone involved should have understood in advance how it would handle Ms. Greco’s bills. It was spelled out “in the certificate of coverage the member receives when they sign up for the plan,” said Maria Gordon-Shydlo, a spokeswoman for Oxford.

Ms. Greco, 45, had surgery at Mercy Medical Center in Rockville Centre, N.Y., a hospital in Oxford’s network, so she expected everything except the surgeon’s fee to be completely covered. Instead, she learned months later that she was being charged a $1,000 deductible and 30 percent of all remaining costs, more than $4,700 in all.

When she received the bill, she and her husband were both recovering from major medical treatment, they were out of work, they expected to lose their health insurance within months and they were trying to sell their home.

“We had no idea how we were going to pay it,” she said. “I just sat at the kitchen table and cried.”

Ms. Greco said, “It’s an unreasonable policy that an in-network hospital suddenly becomes an out-of-network hospital just because you use a different doctor.”

Officials at the hospital and the Healthcare Association said they had never heard of such a practice until she complained to them. They say they have since learned of a few insurance policies with similar provisions, but that in those cases, the rules are more clearly stated.

Ms. Greco’s troubles began more than two years ago, when she and her husband, Richard, were living in Smithtown, N.Y. Mr. Greco, an accountant and business consultant, had lymphoma and was forced to stop working. He had endured chemotherapy and was awaiting a bone marrow transplant.

Expecting their insurance policy to run out in a few months, Ms. Greco had gastric bypass surgery in June 2004 at Mercy, using a surgeon she had met. “My biggest concern was, because I was very overweight and he had a catastrophic illness, we weren’t going to be able to get insurance again,” she said.

She knew she had to pay 30 percent of the surgeon’s fee because he was not in Oxford’s network, but she thought that everything else would be covered completely. She learned otherwise in the bill from Mercy.

Mercy also stood to lose because of Oxford’s position. Hospitals generally charge insurers higher prices for out-of-network patients than for others. When a hospital joins an insurer’s network, they negotiate a contract that includes much lower charges, and Mercy had such a contract with Oxford.

Oxford paid the hospital based on the lower, in-network rates, even though the insurer told Ms. Greco that the service was out of network. And even at those lower rates, Oxford declined to pay the full amount, saying that Ms. Greco was responsible for the deductible, plus 30 percent of the remainder.

Ms. Greco and the hospital say the only information Oxford gave them in advance about her operation was in written notices authorizing the surgery, which said nothing about her treatment being out of network. Oxford does not dispute that.

Ms. Gordon-Shydlo said that when the surgeon’s office called Oxford to authorize the surgery, the insurer explained that hospital services would be considered out of network. But the surgeon had little reason to focus on coverage for the hospital bill.

Chris Hendriks, spokeswoman for Catholic Health Services of Long Island, Mercy’s parent company, said the hospital went through the usual steps to verify the service would be covered, and got no hint that Oxford would pay anything less than the full bill. “Our finance people say they have never encountered this before,” she said.

Ms. Greco appealed her bill to an Oxford review board and lost. She said when she asked Oxford for an explanation, it cited a single passage in her handbook dealing with out-of-network coverage: “When you receive covered services from network providers but not in accordance with the H.M.O.’s guidelines, those covered services will be covered under this certificate in accordance with its terms and provisions.”

Ms. Gordon-Shydlo pointed to that line and two others. One says that if a patient is treated by an in-network provider, but in a way that does not follow Oxford’s rules, “the covered services will be treated as if they were delivered by a nonnetwork provider.” Another line says Oxford pays on an out-of-network basis for seeing doctors without its approval, but it does not mention services like hospital stays.

Ms. Gordon-Shydlo said the combination of the three passages, separated by several pages, makes it clear that using a nonnetwork doctor makes the entire treatment out of network.

Daniel Sisto, president of the Healthcare Association, said, “Nobody would understand what it’s supposed to mean.”

Many hospitals and doctors in the region say that while they clash constantly with insurers, Oxford is more severe than its competitors, particularly since UnitedHealth took it over in 2004. Jamaica Hospital in Queens has accused Oxford of refusing to pay promised rates and threatening to exclude the hospital from its network, and the hospital has asked law enforcement agencies to investigate.

The state Department of Health has charged that United frequently violates state rules, often by denying payment to doctors. And doctors complain that Oxford, much more than other insurers, accuses them of years of overbilling, based on minimal evidence, and demands large repayments.

Officials at United and Oxford say such complaints come from providers who have benefited from sloppy practices. They say that in making sure rules are followed, they are helping consumers by limiting health care costs.

From the New York Times