I previously posted about insurance companies and the EOB. I’ve been thinking more and more about this issue and have come to the conclusion that physicians must band together and file class action lawsuits against insurance companies in order to collect the reimbursements that they legally deserve. If you take a closer look at the dynamic between insurance companies and physicians, you will find that it is heavily skewed in favor of the insurance company.
Here is typically what happens. A patient sees a physician who has an agreement in place with an insurance company. The physician sends the bill or claim to the insurance company, and the insurance company remits payment along with an EOB. One hundred percent of the time, the insurance company does not pay the full amount of the bill. The physician typically accepts the payment and does not bother with trying to collect more. When the insurance company denies the claim, the physician may try to collect payment and resubmit the claim. But typically there is a huge loss by the physician who does not have expertise in collecting payment.
If you look closely at this you will find that essentially the insurance company short changes the doctor and does not pay the full bill. In any other consumer-vendor interaction, it would be a violation of payment contract. This would be equivalent to going out to dinner and then paying half the bill instead of the whole thing. I’ve never thought of doing that, and I doubt many readers have. In those situations, it would clearly be unacceptable. We know it, and the restaurant would know it.
What makes it any different if a doctor is not paid the amount of his bill? One could argue that doctors provide a community service, and that, if a patient is getting a free ride by the doctor, that is not such a bad thing. However, the reality is that it is the insurance company getting a free ride, not the patient.
What is going to change the system? Class action lawsuits. In my next post I will highlight some examples of how this could all work.
One could argue that taking such action would essentially bankrupt insurance companies and break the healthcare system. If I had to choose between squeezing doctors or insurance companies, you know who I would choose.