State investigating out-of-network medical costs

The state Department of Financial Services (DFS) has launched an investigation of unexpected out-of-network medical costs after receiving complaints from consumers.

The department revealed the investigation as it released a report on unexpected billing from out-of-network providers. Out-of-network providers are medical providers like doctors or specialists that have not contracted with a consumer’s health-insurance plan. Health-insurance plans may not cover the cost of out-of-network providers or may only cover some of their costs.

“Our report shows that all too often, people who try their hardest to stay in-network still get stuck with the most unwelcome surprise — a big out-of-network bill,” DFS Superintendent Benjamin Lawsky said in a news release.

The DFS report also found insurers are paying less for out-of-network care and that consumers have difficulty comparison shopping between health-insurance plans. In addition, it faulted the size of emergency bills from out-of-network providers.

The average out-of-network emergency bill was more than $7,000, which is 14 times what Medicare would pay, according to the report. It cited the example of one neurosurgeon who charged $159,000 for an emergency procedure that would have drawn a Medicare payment of $8,500.

The New York State Conference of Blue Cross and Blue Shield Plans (NYSCOP) is also concerned with doctors’ out-of-network billing patterns, according to a statement from NYSCOP spokesman Paul Larrabee. NYSCOP is a partnership of Rochester–based Excellus BlueCross BlueShield and New York City–based Empire BlueCross BlueShield.

“The problem is most severe with a limited number of specialties, such as neurosurgery,” Larrabee said. “For example, in the last year alone, billings stemming from neurosurgery in some areas of the state have increased by 49 percent. This is exactly the type of outrageous billing practices referenced by the superintendent that will increase the cost of coverage and out-of-pocket costs for our customers.

“The Blue Cross Blue Shield Plans base their out-of-network rates on independent benchmarks that are designed to ensure adequate reimbursement and affordability for our members. This is the proper balance that must be struck when reimbursing physicians.”

Contact Seltzer at rseltzer@cnybj.com