Editor's Note -
This link will take you to a very good NPR story about the history of health insurance in the US . It is well worth the hour it will take to listen to the whole thing. It puts our current struggle to fix the American health care system into perspective.
- SPC
$136 for a $2 bag of saline? Anthem, MaineHealth trade blame in billing disputes
Anthem accuses the hospital network of overbilling and hiding charges;
MaineHealth says the insurer is arbitrarily withholding payments.
by Joe Lawlor - Portland Press Herald - April 17, 2022
An IV bag of saline costs Maine Medical Center $2, but the Portland hospital has charged patients covered by Anthem insurance a total of $136 per bag and also tried to hide the bill, according to Anthem.
Anthem, on the other hand, refuses to pay Maine Medical Center for multiple procedures performed on one patient in the same day, according to the hospital’s parent, MaineHealth. So when a heart patient recently needed two stents, Anthem would pay for only one, the hospital network alleges.
Anthem, the state’s largest insurer, and MaineHealth, the state’s biggest health care network, provided the Press Herald with those and other examples of billing issues they say have added up to millions of dollars in overcharges and underpayments.
The unusual public accusations and details open a rare window on the health care industry’s behind-the-scenes clashes over medical costs and insurance coverage. Medical billing is a notoriously confusing and complex system, with charges that can vary widely for the same procedures. And it’s a system that is opaque for most consumers.
The feud became public this month when MaineHealth announced that Maine Medical Center, the state’s largest hospital, would leave Anthem’s insurance network next January, a decision that would force thousands of patients to pay far higher costs for out-of-network care. MaineHealth said it announced the move because Anthem was shortchanging Maine Med $1 million per month in medication reimbursements while also accusing the insurance company of slow processing and routine denials of $70 million in payments across the health care network.
Anthem has faced similar allegations in other states. Two California hospitals threatened to leave the insurer last year over the same issues but ultimately settled, and Georgia fined Anthem $5 million in March for the way it was paying claims.
If the dispute here can’t be resolved, it could affect at least 300,000 Maine patients who have Anthem insurance coverage — about 54 percent of the state’s market, according to the Maine Bureau of Insurance. Maine Med’s break with Anthem also could disrupt the state’s entire health insurance system by forcing large-scale shifts to other carriers. The potential impacts prompted Gov. Janet Mills to urge both sides to settle the dispute.
But they appear to be far apart.
Anthem officials said a major reason an agreement is so far out of reach is that MaineHealth is overcharging for patient care. They provided the Press Herald with partially redacted medical claims to support the accusation, including two claims that show Maine Med charged $136 for $2 worth of saline – 50 milliliters of saltwater routinely used in IV bags as a vehicle to deliver medicine to patients in hospitals. All patient information was redacted from the claims.
Overcharging doesn’t just drive up the insurer’s costs. It also means patients can end up paying higher out-of-pocket costs, according to Anthem.
“Charges for saline – which they shouldn’t be charging for in the first place – and overcharges for other medications impact consumers in the form of higher cost shares through deductibles and co-insurance,” Denise McDonough, president of Anthem Blue Cross and Blue Shield in Maine, said in a statement. “Businesses in Maine will pay more through higher premiums or, for our self-funded customers, higher direct costs. At Anthem, our role is to advocate for consumers by protecting affordability. We are stewards of our customers’ money, which is why we are standing up to MaineHealth and asking them to right this wrong.”
MaineHealth officials did not directly respond to the accusations about saline overcharging but said Anthem is cherry-picking data and trying to create a distraction from the central issues of the insurer failing to pay MaineHealth what it’s owed for services.
And MaineHealth is leveling its own accusations.
By using loopholes in the contract, Anthem is at times refusing to pay for legitimate medical services, according to MaineHealth. Sometimes, it said, Anthem will refuse to pay for two procedures that occur on the same day. So when a heart patient recently needed surgeries for two stents, Anthem would pay for only one.
The unreimbursed costs are part of the broader dispute over millions of dollars that MaineHealth claims it is owed by Anthem.
“These changes weren’t negotiated in a contract,” said John Porter, MaineHealth spokesman. “They’re finding different ways to come up with new policies which change our model for getting paid. We can’t do business like this.”
Anthem officials said denying claims that appear to be duplications of services is an industry standard as a safeguard against double charging by a health care provider. If separate medical services are performed, the claim will be paid, they said.
“We have a responsibility to our members and customers to ensure the health care services they receive are coded, billed, and reimbursed appropriately and in accordance with our policies aligned with industry standards,” McDonough said.
Kate Ende, policy director for the Maine nonprofit Consumers for Affordable Health Care, said the dispute illustrates how the health care system’s complex way of financing and the push-pull of negotiations between insurance companies and health care providers often doesn’t end in a way that’s best for consumers. In the case of the Anthem and MaineHealth dispute, it could end with patients shut out of care at a major hospital and disruption in the insurance market.
“The system is overly complex and you have each party with different, competing interests,” Ende said. Health care networks and insurance companies “through a variety of mechanisms and levers are trying to reduce their costs or increase profitability.”
“The consumer is often the one left holding the bag,” Ende said.
A key factor in the dispute is MaineHealth’s accusation that Anthem is improperly reducing reimbursements for prescription drugs.
The hospital network says the underpayments effectively erase the benefits Maine Medical Center should be getting from a federal discount program known as 340B. Participating hospitals get discounted drugs in return for the care they provide to uninsured and low-income patients.
The 340B discount amounts to about $1 million per month in cost savings to Maine Med. But MaineHealth says Anthem has reduced reimbursements to effectively eliminate the hospital’s savings. Porter said Anthem is demanding MaineHealth charge Anthem only for drugs “based on acquisition costs.”
Anthem spokeswoman Stephanie DuBois has said the dispute of prescription drug reimbursements is not about the 340B discount but “goes back to the fact that MaineHealth unilaterally raised charges, which is costing our members and all of Maine Medical Center consumers more money. We can’t allow that to happen,” she said.
Anthem, meanwhile, says the hospital’s saline bills are an example of Maine Med overcharging.
Anthem officials said they believe the practice is more widespread but that the charges are hidden, such as being listed as a pharmacy charge that would show up only on an itemized bill.
During an audit of 96 claims, Anthem found $258,000 in saline charges hidden in bills, officials said. They provided the Press Herald with two bills that show the $136 saline charge. Anthem officials said they don’t know the scope of the problem, and could provide no evidence that it is widespread, because MaineHealth will not provide bill details that would reveal actual charges for saline.
“We have asked MaineHealth for data so we know the full scope of the issue, and they have refused,” Anthem’s McDonough said. “This is why both Anthem and MaineHealth engaged an independent mediator to help resolve this matter. We remain committed to this process in an effort to resolve this matter and hope MaineHealth will rejoin us.”
Much of the $136 Maine Med has billed for saline is broken out as a $125 restocking fee, according to Anthem. The bills provided to the Press Herald did not include a detailed breakdown of the $136 charge.
“The fee is a money grab to inflate revenues, pure and simple,” McDonough said. “Anthem members should not be charged for saline in the first place, let alone have to pay an exorbitant fee on something that should only cost approximately $2 a bag.”
Another example of overcharging, according to Anthem, is the hospital’s inflated charge for Alloderm, which is a tissue used in breast reconstruction for cancer patients. Anthem says the Alloderm should cost $20,000 but that Maine Medical Center is charging $50,000. It provided a bill showing a $50,000 charge.
Porter, while not specifically responding to the overcharging accusation, said Anthem is trying to divert attention from the insurer’s “routine denials for coverage of needed care” and refusal to pay for services. And he cited Anthem’s contract disputes with providers in other states.
“It is therefore disappointing, but not surprising given that it has resorted to this tactic in other states where its practices have been at issue, that Anthem is taking hospital pricing data out of context and trying to distract attention from these well documented issues,” Porter said. “We would urge Anthem to focus its attention on the needs of patients, who understandably have a lot of questions about how Maine Medical Center’s departure from its network in 2023 will affect them.”
Indianapolis-based Anthem operates in 14 states and has been involved in similar disputes with other health care networks, some of which have also publicly criticized its practices and threatened to leave the Anthem network.
Two California hospital operators announced last year they would terminate their contracts and leave the Anthem network. The CEO of one hospital, Shasta Regional Medical Center in Redding, accused Anthem of “repeated breaches of our contract,” while Anthem accused the hospital of trying to back out of an agreement to get higher reimbursement rates. Both California hospital operators later reached new contracts with Anthem and did not leave the network.
Last month, Anthem was fined $5 million by the Georgia Bureau of Insurance for problems that included improper claims settlement practices and slow reimbursements.
The Maine Bureau of Insurance has launched an investigation of Anthem after getting numerous complaints from health care providers about underpaying claims, a high proportion of denied claims and slow reimbursements. That investigation is expected to take months.
Ende, of Consumers for Affordable Health Care, said the bottom line is that there is weak regulation of the cost of health care and little protection for consumers.
“There’s not a lot of oversight in how hospitals set prices,” Ende said.
“There’s nothing to ensure the consumers’ interests are really being represented in all of this,” Ende said of the dispute between MaineHealth and Anthem. “There are these different, competing interests, but nobody is there fully on behalf of the consumer.”
Maine community health centers devastated by lack of funding
Community health centers in Maine say they're devastated that funding to increase their reimbursement rates is not included in the state's supplemental budget, which has received initial approval from the Appropriations Committee.
Darcy Shargo, CEO of the Maine Primary Care Association, says rates for the state's 20 community health centers haven't been adjusted in 20 years. She says health centers were hopeful that would change at a time when the state has a considerable surplus.
"We're feeling pretty demoralized right now. Pretty exhausted already because of COVID. And now, to be facing this ongoing challenge with our rates, it's pretty overwhelming," she says.
Shargo says health centers, which provide care in underserved areas, had asked for $5 million in additional funding per year. She says without the boost in funding, community health centers will struggle to meet the pent-up demand for services, especially behavioral and dental health.
Coleen Elias, CEO of Community Clinical Services in Lewiston, says community health centers, which provide low-cost care in underserved areas, must accept patients regardless of ability to pay.
"Community clinical services, we typically operate with a million-dollar loss every year. What this funding would do is cut our deficit in half if we were simply reimbursed how we should be by MaineCare," she says.
Elias says community health centers were among providers on the front lines of the COVID-19 pandemic, and staff feel demoralized about the lack of investment — especially as centers see an increased demand for services, such as behavioral health and dental care.Anthem president: We’re working to protect health care affordability
The insurer is committed to coming back to the negotiating table, and it hopes MaineHealth will join them, Denise McDonough says.
by Denise McDonough - Portland Press Herald - April 26, 2022The reality is, health care costs in Maine are high – some of the highest in the country – and if we are not vigilant, they’ll continue to climb higher. An objective 2019 study by the University of Pennsylvania ranked Maine as having the fourth highest health care cost burden for working families in America, and a 2020 study by the Rand Corp. showed prices paid to hospitals in Maine by private insurers are 252 percent of what Medicare would have paid for the same services at the same facilities.
The result? Maine can be such an expensive state for health care that some employers find it more cost-effective to send their employees to Boston for certain surgeries or care.
The findings of these studies and others do not come as a surprise to me, nor to Maine employers and consumers. The majority of our members in Maine work for companies that are self-funded, which means an insurer like Anthem administers the plan, but the employer pays for health care costs directly; any increases health systems charge for medical expenses is a direct increase in the expenses they pay. Employers with “traditional” plans, where the insurer assumes the risks and the costs, see their premiums increase as costs go up.
Simply put, the prices health systems charge for services is the primary driver of health care spending. If the cost of services continues to rise unchecked, all Mainers will pay more for health care through higher premiums and higher out-of-pocket costs. If that sounds unsustainable, that’s because it is.
At Anthem, our role is to protect our customers from increased costs and to protect affordability for the businesses and people we serve. That’s the whole reason why we enter into contractual relationships with providers and health systems: to be stewards of our customers’ money.
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Our work is as important now as ever. Through routine audits, we discovered MaineHealth has overcharged our members. In 2018, we discovered overbilling by Maine Medical Center in Portland for anesthesia and operating room services. As a result of an investigation, MaineHealth eventually acknowledged the overcharging and issued refunds amounting to nearly $20 million. If it were not for our internal audits – a system of checks and balances to protect our members – these overcharges may never have been discovered.
Unfortunately, we find ourselves in a similar situation, where through a routine audit, it was discovered that MaineHealth has once again overcharged Maine consumers and charged them for services they shouldn’t have, which we believe totals millions of dollars. Disputing such charges is at the heart of the current dispute with MaineHealth.
Anthem has been partners with MaineHealth for decades, and in order for all Mainers to have access to high-quality, outcomes-driven health care, we believe strongly that this partnership must continue. To help resolve these matters with MaineHealth, we have engaged an independent mediator.
As, respectively, the largest payer and provider in the state, Anthem and MaineHealth have a responsibility to address the challenges of rising health care costs on behalf of the people we mutually serve. We at Anthem Blue Cross and Blue Shield agree with the governor that it is in the best interests of consumers to come back to the negotiating table and hash out our differences. I am committed to doing so, as are the hundreds of Mainers I work with every day. We are hopeful MaineHealth will join us.
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