By Richard N. Gottfried
timesunion.com, April 1, 2012
You buy a health insurance policy that covers care by “in-network” doctors and other providers, but also promises that if you go to an “out of network” provider, it will pay based on “usual and customary charges.” Your family doctor refers you to an out-of-network specialist, and it turns out the insurance company offers to pay about half the bill you get.
A few years ago, then-Attorney General Andrew Cuomo and a group of physicians brought a massive lawsuit against the top insurance companies. The charge was that those insurers were promising to pay based on “usual and customary” rates for out-of-network services, but those rates were bogus — and outrageously low.
The insurance companies agreed to settle the case. They agreed that the attorney general would set up an independent nonprofit organization, called Fair Health, to publish legitimate data the insurance companies would use for determining “usual and customary” charges.
Now, insurers are getting around the settlement by no longer promising to pay based on usual and customary; they will pay whatever they choose to pay.
So I have introduced a bill in the Assembly, carried in the Senate by Senate Health Committee chairman Kemp Hannon. It says that your health insurer company must disclose how it calculates out-of-network payments, and state them as a percentage of the Fair Health usual-and-customary rate. And it says the state Department of Financial Services — the new name of what used to be the Insurance Department — may not approve an out-of-network insurance policy unless it actually provides “significant coverage” of the Fair Health usual-and-customary rate.
In other words, insurers have to be open with their customers, and they can’t claim a policy covers out-of-network services if it doesn’t really pay reasonable amounts for them.
The Fair Health court settlement was hailed as a landmark. But the health insurance companies quickly found a way around it. If our bill becomes law, they may find a way around that, too. The problem is, whatever reforms we enact, our health coverage still relies on insurance companies.
Instead, New York should establish a universal publicly funded single-payer system, funded by broad-based revenue based on ability to pay. I sponsor an Assembly bill, carried in the Senate by Tom Duane, to set up such a system, called “New York Health.”
You and your doctor would work on keeping you healthy, and New York Health would pay the bill.
(Richard N. Gottfried of Manhattan is chairman of the state Assembly Committee on Health.)
http://www.timesunion.com/default/article/Let-New-York-Health-help-pay-the-bills-3451653.php
Comment:
By Don McCanne, MD
Yesterday’s Quote of the Day message explained how, in a legal settlement, private insurers were required to develop a new program – FAIR Health – to be used to determine what were fair “usual and customary” fees after they had been caught cheating patients through the Ingenix program they had been using. We were rightfully outraged when the insurers bypassed this new program on the basis that the legal settlement did not require them to actually use FAIR Health.
Chairman Richard Gottfried of the New York State Assembly Committee on Health has introduced a bill – A. 7489-B – which would require private insurers to disclose how they calculate usual and customary fees plus require that they disclose them as a percentage of what the FAIR Health fees would be. There is nothing like requiring transparency of entities that are trying to cheat you.
But what will this accomplish? As Gottfried states, “The Fair Health court settlement was hailed as a landmark. But the health insurance companies quickly found a way around it. If our bill becomes law, they may find a way around that, too. The problem is, whatever reforms we enact, our health coverage still relies on insurance companies.”
The private insurers will never change. Gottfried certainly understands this. That is why he has introduced another Assembly bill – A. 7860. As he states, instead of relying on insurance companies, “New York should establish a universal publicly funded single-payer system, funded by broad-based revenue based on ability to pay.”
Come to think of it, we should do that for the entire nation.