FIXING THE GAME

Ideas from the insurance industry and its supporters

Fixed Rule:

The Los Angeles Times reports on the troubles health care providers have getting paid:

“In late 2007, Centinela Hospital in Inglewood was losing nearly $1 million a month and had piled up $15 million in debt. Among the causes of the crisis: $25 million in overdue bills.

“Collecting that money would have given Centinela a measure of relief. But the bills went unpaid, and the century-old medical center was sold. The new owners slashed services, closed half the operating rooms and laid off a third of the employees.

“Who owed Centinela that elusive $25 million? According to hospital officials, it was health insurance companies.

"’Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival,’ said Von Crockett, Centinela's chief executive. ‘Every single doctor and hospital is writing off money they are legally owed but don't collect. It's an insane situation.’”

Learn more about the problems health care providers face with insurers.

In fact, when asked which practices they found "most challenging," twice as many doctors reported getting paid by private insurers as they did getting paid by the Medicare (the public program for people over the age of 65 or with severe disabilities).

And their concerns seem to be warranted: another study showed that private insurers pay at contracted payment rates as little as 62% of the time, while Medicare does so 98% of the time. The American Medical Association (AMA) adds that "Studies suggest that physicians divert 14 percent of their revenue to a costly fight for fair reimbursement."

But—surprise—the insurance industry says health care providers are to blame. Karen Ignagni, president of America's Health Insurance Plans (AHIP), the insurance industry's lobbying arm, told the Los Angeles Times that insurers question or reject claims "when we don't get full information or when we get duplicate bills."

Ignagni went on to acknowledge, however, that billing processes were inordinately complex. She said insurers were aware of providers' complaints and were trying to streamline billing systems. The newspaper gave an example of the “inordinately complex” administrative hurdles facing providers:

“Dotti Smith, office manager for a group of surgeons affiliated with St. Mary's Hospital in Long Beach, recently billed a major insurance company for a gallbladder operation. The insurer had preauthorized the surgery and the surgeon was a member of the insurer's network of preferred physicians, Smith said. But the company refused to pay the $3,100 bill.

“Why? The patient was enrolled in a subcategory of coverage with a smaller network of doctors that did not include the Long Beach surgeon.”

"No question that administrative simplicity has to be job one," Ignani told the Los Angeles Times.

Streamlining their administrative processes is a reform the insurance companies should be doing on their own. If they know “it is job one,” what exactly are they waiting for?

We can’t wait on the insurance companies any longer! It is time for strong and fair regulation of the insurance industry.

Fair Rule:

• A public alternative to insurance company coverage that is accountable to us.
• Fair regulation and oversight of insurance companies, with government as a watchdog.



Learn More

Read more in the "Fixing the Game" Archive.