"Customary fees"

[Mascott]

What is the name of your state? NJ

How do insurance companies [for example, Oxford!] determine what a "customary fee" is, when reimbursing for health care? How does one challenge the insurance company if the reimbursement seems inordinately low?

 

[MellowCat]

As I understand it, "customary" these days usually means the amount your physician has agreed to accept for the service rendered. Physicians have a "fee schedule" written in their contracts with each insurance company they contract with. If they charge over the "fee schedule" (they normally do) the difference has to be written off your bill, (except your copay and/or deductible amount. (This doesn't apply to indemnity plans.) If you are being billed by your physician for the amount over the fee schedule less you copay and/or deductible, your physician's office, in most cases, has made a mistake and must write off the difference. This also doesn't apply if the service isn't covered under your policy, of course.

If the physician hasn't been payed according to the fee schedule, they will most likely see to it that the situation is corrected by writing an appeal to the carrier.

 

[cbg]

On the other hand, if the physician is not a member of the carrier's network, the carrier will use a number of physicians in the same zip code who provide the same services, and use a percentile of what the various physicians charge.

 

[Mascott]

I appreciate your response, but actually, I'm not concerned about what the physician charged for her services [which are competitive, "going rates,"] as I am about how little the insurance company reimbursed me. After the deductible was satisfied, the balance of the bill was $400...and my insurance reimbursed $140. When I questioned that, the response was, "we paid back according to what we feel are customary fees." In other words, they felt that the physician's services were "worth" X amount of $, and reimbursed according to what THEY felt would have been a reasonable fee for the physician to charge. Its infuriating! I don't know how, or if I can "challenge" them on that. Any ideas? Thanks

 

[cbg]

You probably can't. But just out of curiousity, is your insurance supposed to pay 100% of the balance after the deductible? 80%? 75%?

 

[Mascott]

Thanks for responding...they're supposed to pay 80%.

 

[cbg]

Which means the approved amount would be $175. 80% of $175 is $140.

I haven't worked for the insurance industry since 1998, and I never worked in the area that sets and approves the fees; that's not my field. But I know that the company I worked for paid at the 80th percentile of the fees set by physicians in the area, using the exact same zip code and the exact same procedure code. (If there were not enough physicians in the exact same zip code to make a reasonable sample, they would use additional physicians in areas of similar make-up.) The end result was often not unlike the situation you're in, so this is not uncommon.

The ONLY way I can see to fight this, would be to successfully argue to your state insurance commission that the amount paid did NOT represent an accurate representation of the usual fees charged in your area. And since the fee schedules used by insurance carriers have to be approved IN ADVANCE by the state, that's likely to be very much an uphill battle. Remember that we're talking about an percentile, not an average.

 

[Mascott]

Thank you so much for this response. I have to get all the paper work together, and I'll call around to find out exactly what other physicians are charging for the services [for the sake of argument, mammography, then an ultrasound to follow up questionable results of the mammogrpahy...and a breast exam by the physician, and a bone density...it was a hell of a week!]

Its not even the extra $35, as much as the principle. What's makes it more interesting is that I'm a certified nurse-midwife in private practice, and my husband is a pediatrician!

Thanks again for your thoughts.