Trigon Blue Cross/Blue Shield (Copayments) When most people are told they owe a coinsurance payment on a medical bill, they simply grimace and write a check; not Gerald Haeckel, a retiree from Richmond, VirginiaTrigon Blue Cross/Blue Shield (Copayments) When most people are told they owe a coinsurance payment on a medical bill, they simply grimace and write a check; not Gerald Haeckel, a retiree from Richmond, Virginia
Trigon Blue Cross/Blue Shield (Copayments)
When most people are told they owe a coinsurance payment on a medical bill, they simply grimace and write a check; not Gerald Haeckel, a retiree from Richmond, Virginia. He wanted proof that he was not paying more than the 20 percent portion that his health insurance policy required. When his insurer, Trigon Blue Cross/Blue Shield, balked, the retiree besieged state and federal officials with demands for an investigation.
Gerald’s problem with the insurer-provider negotiated discounts began when he became confused by a bill sent by Trigon Blue Cross/Blue Shield. The bill was for Gerald’s wife’s lumpectomy, which is an outpatient surgery to remove a tiny breast tumor. Trigon’s benefits- explanation form stated that the surgery had cost $950, that Trigon paid 80 percent, or $760, and that Gerald owed a 20 percent copayment of $190. But then Gerald received a list of charges from the surgery center indicating that Trigon’s share of the bill had been more than halved to $374 because of a “contractual adjustment.” Gerald assumed that a mistake was made in the surgery center’s statement because if it were correct his $190 copayment would exceed a third of actual cost, instead of the 20 percent called for in his insurance policy.
Ultimately, Gerald’s scrutiny of the $950 surgery bill led to a surprising discovery. Although insurance companies frequently complain about being duped by fraudulent policyholders and providers, Trigon and dozens of other health insurers and managed care companies stand accused of a scheme to siphon off millions of dollars from their policyholders. How does the alleged scheme work? For surgery priced at $1,000, the typical plan might call for the insurer to pay 80 percent, or $800, which leaves the patient with a $200 copayment. But if the insurer has negotiated a 50 percent discount from the provider and does not pass any of it along to its policyholders, the patient’s $200 copayment becomes 40 percent of the $500 actual bill, and the insurer’s portion drops to only $300.
Trigon’s responses to Gerald’s queries stirred up more questions than they answered. Norwood H. Davis, Trigon’s CEO, assured Gerald that he did indeed owe the $190, and added that the details of any Trigon’s provider discounts were “proprietary.” In another letter, Norwood made a distinction between Trigon actually paying its $760 share of the bill and “discharging” it. Norwood added that although Trigon might try to persuade a provider to accept less than its $760 portion of the bill, a policyholder, such as Gerald, was free to try to persuade the provider to accept something less than the required $190 copayment. Gerald, who by that point was incensed, replied “suggesting that an individual policyholder negotiate with a provider for price concessions borders on the insulting!” and he threatened to take the matter up with state regulators.