A Chicago-area couple both got preventive colonoscopies as benefits through their Obamacare plans with Blue Cross and Blue Shield of Illinois. A periodic colonoscopy is recommended by the U.S. Preventive Services Task Force for patients beginning at age 45. Preventive colonoscopies in asymptomatic people are free under federal law. Obamacare requires that health plans cover preventive services recommended with a grade of A or B by the U.S. Preventive Services Task Force. By contrast, if either of the couple had mentioned gastrointestinal symptoms the screening service would have become diagnostic, meaning the procedures would require cost sharing. A word to the wise: when discussing a preventive colonoscopy with your physician, never mention any symptom involving your colon.
The colonoscopy provider was a gastroenterology practice owned by private equity. The problem with private equity investing in health care is that investors often find ways to exploit weaknesses in the health care system. Critics often complain private equity doesn’t compete to make care more affordable, convenient or improve quality. Rather, they work to boost revenue at the expense of patients and payers. Private equity investors bear considerable responsibility for surprise medical bills in emergency rooms, air ambulances and from anesthesiologists.
Both colonoscopies were charged at $2,034 but with negotiated discounts their health insurer was responsible for just under $400 apiece. There were two additional charges for $600, requiring $250 in cost sharing (i.e. a total of $500). Ordinarily patients are not required to pay anything for preventive services. After going through the itemized charges, the couple discovered they were responsible for the cost of surgical trays.
After their screenings, Panozzo said she and her husband each saw the same strange $600 charge from the Illinois Gastroenterology Group on their insurance explanation of benefits statements. Bills from the gastroenterology group explained these charges were for “surgical supplies.” Her insurer eventually told her the codes were for “surgical trays.”
The couple could have bought Grafco brand stainless steel surgical trays on Amazon for around $30 apiece. Perhaps they could have brought one with them on the day of the colonoscopy. Of course, I’m being facetious. The charges have nothing to do with the reusable trays. Rather, it’s a loophole to hit patients with a surprise medical bill. (Did you really think these guys were going to play nice after the No Surprised Act was passed in 2020?)
Under the law, though, it is the insurer’s responsibility to make preventive care available at zero-cost to patients. Providers may exploit this loophole, said Sabrina Corlette, a research professor and co-director of the Center on Health Insurance Reforms at Georgetown University.“The insurance company is supposed to pay the full claim, but there is no requirement on the provider to code the claim correctly,” Corlette said.In this case, BCBS of Illinois covered the full cost of the screenings the couple received, according to its own documents. But those documents also showed that each patient was on the hook for a portion of their separate, $600 charges.
The physician practice claimed charging patients for surgical trays was an arrangement it had with the health insurer in lieu of a use fee for the physician clinic. That explanation doesn’t make sense, however. The health insurer presumably negotiated a fee of about $400 for preventive colonoscopies, but it appears the private equity investors who owned the practice explored ways to boost the revenue from the procedure. Economic theory suggests that if they could have charged insurers more they would have. It doesn’t stand to reason they would make a deal to charge insurers less in return for making patients pay for surgical trays. Why not tack on a $250 fee that is billed directly to patients? Most patients would probably pay it, which would increase the net revenue for the colonoscopy by more than 60%. Besides, patients who became irritated would probably blame it on their health insurer. It’s common to blame health insurers for not covering exorbitant bills, but patients are far less likely to lay blame on the providers who’ve strategized ways to surprise bill them.
1 thought on “Private Equity Found Yet Another Way to Surprise Medical Bill Patients”