Joe Paduda at Managed Care Matters is understandably frustrated by his inability to get straight answers from his insurance carrier or prospective providers to his questions about allowable amounts and procedure prices:
I called our health insurer … [and] asked what the allowable amount would be. They could not tell me … When I asked the par provider what the allowable amount would be, they couldn’t tell me either.
Here’s the thing: the carriers and providers aren’t being deliberately evasive. The truth is that neither has any way of knowing with certainty what the price or the allowable is going to be, even on something as seemingly straightforward as an MRI. There are two primary reasons why this is so:
1) A large percentage of physician orders have to be modified—after consultation with the doctor—because they are not specific enough or request the wrong test for a particular diagnosis.
2) The reimbursement amount for a given procedure varies significantly from provider to provider, even among participating hospitals, because contracts are negotiated separately with each.
In other words, no one really knows what procedure you’re going to end up with until you actually get on the table, and the insurance companies have woven such a Byzantine web of contracts and reimbursement arrangements that no one can tell you what a particular provider is supposed to get without researching the individual contract.
And that is the Achilles heel of CDHC. Consumers can’t compare pricing among health care providers as they would with most other goods or services. In most cases, the information needed to do so simply isn’t available.
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