A Protection Racket By Any Other Name

In order to afford to offer health insurance a number of my clients audit their hospital bills to make sure the charges are reasonable and undelivered services are not slipped in. As most PPO contracts are a percentage off billed charges that starting number is very important.

Following is part of a letter we received from a hospital's attorney last week;

"Hospital personnel were in communication with your office and were told that you needed the itemized bill. I question whether you are entitled to receive an itemized bill, given the fact that this claim should be repriced through the XXX PPO (not it`s real name), which presumably has a contract with either your company or the plan, and I believe that the contract would preclude your request."

Few key points here, this presents employers with two choices;

1. Either don't employ a PPO and subject your plan and members to 100% of hospitals` billed charges, remember these are charges no one actually pays because they are so high, discounts run up to 80%+ off these artificial charges; or

 2. Employ a PPO and forfeit all rights to review or question the bill.

Keep in mind how one sided PPO agreements are, a plan is purchasing a discount but they have no idea what that discount is off of. A 5% discount on a $2,000 bill is better then a 50% discount on a $20,000 bill (20K is an actual claim we received for what should have been a 2K colonoscopy, even with a 50% discount hospital was still trying to collect 10K for a 2K procedure).

If someone in almost any other field tried what this attorney is they would be brought up on extortion charges. The good news is it might not be long till he is;

State of California, ex rel Rockville Recovery Associates, Ltd. v. Multiplan, Inc., et al.

 In summary, the memorandum describes fraudulent billing practices perpetrated by hospitals and other healthcare facilities, whereby these billing entities routinely submitted invoices for services that were not performed, were already paid for as part of other claims, or were simply inexcusably excessive. The memorandum identifies these practices as fraudulent, and the plaintiffs seek to pursue legal action against the billing parties.


In addition to these predatory billing practices, the memorandum goes on to accuse the applicable PPO network of aiding and abetting these fraudulent billing practices. Indeed, the network contract that bound the benefit plan in this matter, prohibited the plan from auditing the claims in question, and precluded the payer from examining the claims for inappropriate, excluded, and/or excessive charges. This is likely a scenario with which you are already familiar.

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A Protection Racket By Any Other Name
A Protection Racket By Any Other Name
Reviewed by ndolpit
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Rating : 4.5