Tag Archives: out-of-network

Quest’s Competitors File Lawsuit for Prohibited Arrangements with National Health Plans

Over the past several years, some commercial insurers have made a concerted effort to reduce costs associated with laboratory services, which physicians have increasingly relied upon in diagnosing and treating patients. In particular, insurers are concerned with the rise in laboratory services being performed out-of-network and the increased costs associated with such claims. Despite the imposition of higher premiums for out-of-network benefits, insurers are attempting to do indirectly – what they cannot do directly – to restrict the ability of health plan members to receive laboratory services from out-of-network providers.

A federal complaint was filed on November 14, 2012, in the Northern District of California that highlights the extent of such activities alleged to have been taken by Aetna, Inc., Blue Shield of California, and Blue Cross and Blue Shield Association in violation of federal and state law, and charges that such efforts are being initiated in concert with Quest Diagnostics Incorporated, the largest clinical laboratory provider in the nation. Rheumatology Diagnostics Lab., Inc. et al v. Blue Shield of Cal. Life & Health Ins. Co. et al, Case No. 12-5847 (November 14, 2012).

In short the complaint alleges that Aetna and Blue Shield, in order to receive capitated rate discounts on laboratory services, have conspired with Quest to direct all laboratory testing business to Quest by controlling referrals and reducing competition by the following: Continue reading

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New York Attorney General Settles Balance Billing and Overpayment Disputes

New York State Attorney General Eric Schneiderman announced on Tuesday that it had reached settlements with Group Health Inc. (“GHI”) and a New York City health care provider regarding overpayments to consumers.

GHI has agreed to repay consumers for approximately three years of overbilling.  GHI purportedly charged its assureds out-of-network rates for certain medical providers, including radiologists, pathologists, and anesthesiologists.  This practice was contrary to GHI’s policy.  Reportedly, GHI assureds sometimes paid in the thousands of dollars for services that GHI should have covered.  Attorney General Schneiderman’s office reached an agreement with GHI to return the overbilled amounts, which are thought to total nearly $500,000.  GHI has also agreed to pay a penalty, assist consumers who were subject to debt-collection as a result of GHI’s overbilling, and train its employees to avoid this practice in future. Continue reading

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New York State’s Efforts to Reform Out-of-Network Payments

The New York State Legislature introduced a bill (S.5068A/A.7489B) to address benefit coverage for out-of-network care by health insurers.  The stated purpose of the bill is to protect enrollees that purchase premiums to permit choice and cover the cost of treatment by out-of-network providers, but who are still faced with sometimes expensive and unexpected out of pocket costs as a result of the payment amounts from insurers in relation to the actual costs of care.  To do so, the bill requires any health insurance carrier to provide significant coverage of the “usual and customary” costs of out-of-network health care services (defined as at least 80% of the FAIR Health rate) and include this methodology in the plan contract.   The Act would apply to all policies and contracts issued, renewed, modified, altered or amended on or after the effective date.  The bill is currently in committee in both the Senate and Assembly with the legislative session ending June 21. Continue reading

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The Wild, Wild West of Billing by Out-of-Network Labs and Waivers of Patient Responsibility

O’Connell & Aronowitz attorneys, Jeffrey Sherrin, Kurt Bratten, and Charles Dunham, spoke at a national meeting of clinical laboratories in Las Vegas on May 19, on the complicated issue of referrals to and billing by out- of-network (OON) clinical laboratories, and the waiver of patient responsibility.  Waivers of copays, deductibles and balance billing have been used increasingly by OON labs to compete for the business of patients who have OON benefits.  Labs may be shut out of networks because of exclusive provide agreements or closed panel, or they may find that reimbursement is actually greater as an OON lab and choose not to seek to participate with individual plans.  Many OON labs market that patients will be treated no differently than if they went in-network labs, meaning usually that they will not be billed for any patient responsibility for balance billing or other costs that they would not have if their specimens were tested by an in-network lab.

These billing practices have come under tremendous and aggressive scrutiny by federal and state prosecutors, state regulatory agencies, third-party payers with their special investigations units, and competitors.  Our attorneys presented a comprehensive review of all activities going on around the country, including criminal investigations or prosecutions, litigation brought by third-party payers, the most active being Aetna Health, and litigation and complaints between competitor labs.  They also explained the respective interests of all involved parties to the debate over the legality of waivers or limitations of patient responsibility — those of patients, in-network labs, out-of-network labs, third-party payers, and state governments — as well as a review of key states’s laws that come into play. Continue reading

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