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Report suggests out-of-network providers may be fleecing consumers Posted: April 11th, 2013

By Maryalene LaPonsie

If you are having a health crisis and pick the wrong emergency room, your bill could be 64 times more than what the government pays for the same service.

A report issued by America's Health Insurance Plans, an industry group, indicates some providers are charging sky high rates to patients who stray outside their medical insurance network. The AHIP report used data collected from 30 states for a variety of common medical procedures and services.

'Exorbitant' out-of-network costs

Physicians and providers who participate in a network as such an HMO or PPO agree to charge specific rates for their services. This is one reason these types of plans offer more affordable health insurance coverage. However, out-of-network providers can charge any fee they wish.

Calling some of the fees 'exorbitant,' AHIP compared the highest amount charged by providers for out-of-network care to the amount Medicare reimburses for the same services. The comparison found consumers using out-of-network providers may be charged anywhere from 33 to 95 times the Medicare reimbursement rate.

Among others, the report considered the highest reported out-of-network costs for the following services:

  • Colonoscopy and biopsy: Highest out-of-network charge is 33 times greater than Medicare reimbursement ($19,000 vs. $571)
  • Emergency room visit: 64 times greater than Medicare reimbursement ($12,000 vs. $187)
  • Upper GI endoscopy and biopsy: 73 times greater than Medicare reimbursement ($29,998 vs. $409)
  • First 30-74 minutes of critical care: 93 times Medicare reimbursement ($27,310 vs. $294)
  • Subsequent hospital care: 95 times Medicare reimbursement ($9,471 vs. $100)

Group calls for government inquiry

While only 12 percent of medical insurance claims were for out-of-network services in 2011, AHIP says the significant mark-up on some care affects the affordability of all health care. The group also says it is time for lawmakers to take a closer look at the issue.

"As we shine a spotlight on the affordability issue, we encourage policymakers to look at how much is being charged for services, particularly since there is often no relationship between higher charges and higher quality of care," said AHIP President and CEO Karen Ignagni in a written statement.

Despite calling for more oversight of the fees, the AHIP report did not delve into how much is reasonable for providers to charge out-of-network patients.