Prevailing Charge

[darlylar]

What is the name of your state? What is the name of your state? Idaho

My health insurance has denied a large portion of a charge because they say they will pay only the "prevailing charge" for the service. I have called ever single provider in my town and my research supports my claim that the insurance company's "prevailing charge" is certainly not prevailing in this area. I have appealed their decision, including in my letter the details of my research. (I listed every provider in the city and their charge for that particular service BY CODE.) The insurance company's response is another letter denying my appeal because "prevailing charge is the amount, as determined by us, that most physicians are charging fora particular service in the same or surrounding geographical area." How can they claim that when my research shows otherwise? Where do I go from here?

The amount they are refusing is less than $400. Is it worth getting a lawyer for this?

Can I ask my provider to accept their payment in full? Or split the difference with me?

 

[Beth3]

Insurance companies determine prevailing charges (actually, they hire outside companies who specialize in this to provide the data to them) on geographic areas larger than just your town, unless you're in a major metropolitan area. In fact, it's not uncommon for medical providers in smaller towns to charge more than those in large cities because of the lack of competition for medical services.

In any case, it's not worth hiring a lawyer over a $400 dispute, as for you to bring a successful claim against the insurance company, I expect you're going to have to prove that their methadology in determing prevailing charges is incorrect. We're talking expert witnesses, lawyer's fees, etc. That's going to cost you WAAAY more than $400.

Yes, you may certainly ask your doctor to forgive the balance or even split the difference. You're perfectly free to negotiate with the doctor.

 

[darlylar]

Thank you so much, Beth.

Actually, I was on the phone with them again today and the claims supervisor told me it was their policy to pay "90% of the prevailing fee," not 100% as it says in my enrollment material. Hmmmmm. . . .

 

[cbg]

Are you certain they said, 90% of the prevailing fee, and not, at the 90th percentile? It's not the same thing, but a lot of people confuse them.

 

[Beth3]

Excellent point, cbg. My bet is on the 90th percentile. And if they are paying at that percentile, then that is a high level of reimbursement and the doctor that darlylar saw certainly is setting his fees way at the head of the pack.

Darlylar, what that means is that the insurance company takes ALL the fees in the appropriate geographic area for the particular procedure you had done and lists them from low to high, and then draws a line across that list at the 90th percentile. If anyone charges more than that dollar figure, they are rejecting the DIFFERENCE as exceeding "usual and customary" and paying at bill at the dollar amount shown at the 90th percentile.

All insurance companies follow a similar practice (although they may set their reimbursement level at a lesser percentile) as it's the only thing that prevents a medical provider from billing your insurance carrier $5,000 for a $200 procedure. The bottom line here is that your doctor is charging $400 more than the vast majority of other practitioners in your area for the same procedure.

 

[lkc15507]

I completely agree, likely 90th percentile, meaning that this would indeed be a high level of reimbursement. Now, let me add this, look at your summary plan description (SPD) carefully. There may be a discretionary allowance for determining UCR (Usual Customary Reasonable) charges ie, UCR determinations may not have to comply with the national database. Professional services are billed by codes, specifically CPT codes (won't define, not really necessary). Those codes may be more broad than the specific service delivered. For an example: specialty types of radiation therapy such as IMRT (intensity modulated radiation therapy) or Gamma Knife may be billed with the same code as something less specific such as whole brain radiation therapy. Yet, IMRT and Gamma Knife are available primarily at large tertiary care (teaching / university type / research type) facilities. However, the database for UCR charges--by zip code where service is delivered--may also include averages of those less precise services which would lower the UCR for that particular CPT code. You are on the right track. Continue to look for the actual amounts charged for a very specific service. Not just charges determined by geographical area, but by the facility by facility basis in which the specific (not coded) service is available.
(Before someone else points it out, the example I gave is not perfect as codification in the 2003 book specifically separates the types of radiation I mentioned--however, the principle applies.)

Editing my post: I should add this, if the service received is readily available in your geographic area, you are going to be, pardon me--SOL--Surely out of luck.

Good luck, lkc15507