Dialysis providers have always kept their pricing structures for those of us with private insurance very close to the vest, which of course makes the Republican insistence for patients to compare prices as laughable as it is. It’s impossible for providers to cloak their pricing in the case of Medicare patients, however, because the Medicare reimbursement is public information (US$200-US$250 based on geographic location). But a lawsuit brought in Georgia (.pdf; 2.1Mb) by National Renal Alliance (.pdf; 212Kb) against Blue Cross Blue Shield of Georgia has lifted the veil on these long-protected provider pricing structures.
Insurance companies contract with providers for services. Any provider with which an insurance company does not have a contract is considered to be “out of network.” And these “out of network” fee structures is what the National Renal Alliance lawsuit is all about. National Renal Alliance charges that Blue Cross Blue Shield of Georgia has cut its out of network reimbursement rates by 88 percent.
So, just how much is National Renal Alliance charging insurance companies? According to Urvaksh Karkaria’s Atlanta Business Chronicle report, between US$2,000-US$9,000 per treatment. According to the complaint, “Insurance companies like Blue Cross use so-called ‘usual, customary, and reasonable’ charges to determine the reimbursement for a particular service. In 2006, Blue Cross determined that the usual, customary, and reasonable charge for National Renal’s dialysis services was approximately $2,900 per treatment. This reimbursement was in line with the reimbursement National Renal received (and continues to receive) from other commercial payors. Suddenly, on January 1, 2007, however, Blue Cross cut this reimbursement by 88%, a level far below the usual, customary and reasonable charge.”
The complaint reveals that Blue Cross decided that US$350 was a more usual, customary, and reasonable reimbursement, probably at least partially based on the Medicare reimbursement. Apparently National Renal thinks that’s how Blue Cross arrived at its new reimbursement rate as well and claims that doing so is illegal based on the “federal Anti-Discrimination Statute which expressly prohibits a group health plan from ‘taking into account’ an End Stage Renal Disease patient’s Medicare-eligible status when determining their benefits.”
The reimbursement discrepancy—US$200 on the one side and US$9,000 on the other—is, quite simply, the best argument to date for universal single-payer healthcare in the United States. That the government can negotiate a maximum payment of US$250 for a service that the private sector can’t negotiate for less than US$2,900 says volumes about the value of having a single entity negotiating for all patients.
