Feb. 16--WEST PALM BEACH -- Ever wonder why your insurance company claims a procedure that cost you dearly could be gotten for a fraction of the price you paid?
According to a lawsuit filed in U.S. District Court, it's because the so-called "usual, customary and reasonable rates" most insurance companies use to determine how much they will pay are "rigged to artificially deflate" the cost of the treatment.
The practice effects consumers who use doctors who don't participate in their health insurance plans and the physicians who provide so-called out-of-network services, according to the lawsuit filed by Palm Beach Gardens attorney William Wright. He is seeking millions for the estimated thousands of people covered by Blue Cross Blue Shield of Florida statewide, as well as the millions the Jacksonville-based company serves across the nation.
While the lawsuit targets Blue Cross, it isn't the only insurer that intentionally underestimates how much medical procedures cost, Wright claims.
Various insurers, including United Healthcare, Aetna and CIGNA, use the same flawed rates provided by Ingenix, a Minnesota-based health data company, Wright claims.
The insurers and Ingenix last year agreed to pay a total of $100 million to help start a nonprofit to determine how much insurance companies should reimburse patients who see out-of-network doctors. The agreement was hammered out to settle lawsuits filed by New York Attorney General Andrew Cuomo. The database that will replace Ingenix will be in place later this year.
A study by Cuomo's office found that reimbursement rates in New York were 10 to 28 percent lower than the real costs.
The impacts are magnified for patients and their doctors, Wright said. For instance, his client, Palm Springs resident Daniel Williams, was charged $1,210 for an MRI. Blue Cross said it should have cost $419. Since he hadn't met his deductible, it wouldn't cover it. Further, it wouldn't allow him to claim the full amount toward his deductible.
In many cases, doctors who provide out-of-network services never receive the full amount or have to spend extra money persuading patients to pay up, Wright said. Williams' claims are the basis of what he hopes will become a class-action lawsuit.
Blue Cross officials could not immediately be reached for comment.
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