I recently received a phone call from a friend asking if I had an explanation of something that happened to one of their employees. I had to admit that I had never heard of it before, but considering that they were with a BUCA (Blue Cross, United, CIGNA, Anthem) insurance company, I guess it could happen to anyone, and probably will – with more frequency.
One of their employees had to go to a hospital for a particular procedure. As is becoming rather frequent around the country, this provider wanted payment up front, prior to the procedure. Regardless of your insurance company, and unless you have a copay for a particular office visit for example, more and more providers are requesting payment up front. As more employers are implementing High Deductible Heath Plans with or without a HSA, providers are now beginning to be in the collection business. Previously, they collected their fees from insurance companies, but now they are having to collect their fees from their patients, who may or may not have $2,000, $3,000 or $5,000 in their bank account or HSA.
But what occurred to this employee is a real head shaker. The employee agreed to pay the $900 – cash – for the procedure, and everything went according to plan. As one would expect, the employee then went on to file the claim with insurance company, hoping to get credit for the cash payment. When they received the Explanation Of Benefits back from the insurance company, they were informed that they owed another $2,100!!
The insurance company stated that their PPO contract with that facility for that procedure was for $3,000 and that was the amount that the employee had to pay under their plan. Since the employer had the contract with the insurance company and their PPO Network, then no one could pay less than the contracted amount.
You see, when you’re dealing with an insurance company and their PPO network, per the contract that is the amount that has been negotiated on your behalf – even though you don’t know what those amounts are. Anything paid less than that is in violation of the PPO contract. As an employer, how are you supposed to act as a responsible plan fiduciary, when you know nothing about the contract you’ve entered into, the negotiated rates, the inability to audit claims, and oh by the way – using other peoples money to pay for it (your employees’ contributions) ?
In this situation the employee really only had 2 choices: not submit the claim and pay the $900 hoping that perhaps they wouldn’t exceed their deductible with additional expenses during the balance of the year, OR pay the extra $2,100.
If you want to learn about other options that won’t put you and your employees in the situation that occurred above, email me at [email protected] or come to one of the upcoming events in Ohio and Colorado.
In the meantime, you might enjoy this clip of my interview with Today Show Host and Superman Actor Dean Cain from the TV show “Lois and Clark.” If you’d like to see the entire interview, you can HERE. 