Blue Cross wins round in dispute over duplicate billings

aalexander@charlotteobserver.comNovember 19, 2012 

In a decision that could save Blue Cross and Blue Shield of North Carolina policyholders $16 million a year, the N.C. Department of Insurance has ruled that the insurer doesn’t have to pay repeatedly when hospitals file duplicate charges for medical scans.

The insurer says the overcharging happens when medical technicians take several images of a patient during radiology scans such as MRIs and ultrasounds.

For each image taken, hospitals and providers often bill identical “technical component” fees – for such things as setting up IV fluids and preparing the exam room – even though the setup is performed only once.

The fight over radiology fees began in June 2011, when Blue Cross notified hospitals and doctor practices that the technical fee for second and subsequent images would be subject to a fee reduction of 50 percent. Doctors would continue to be paid 100 percent for each image they analyze and interpret.

The proposed policy is similar to how Medicare reimburses for radiology procedures.

The hospitals and doctors accused Blue Cross of unilaterally changing reimbursement terms set by contract.

In December, the insurance department initially sided with the hospitals and doctors, saying it couldn’t change its payment policy without taking the required steps to modify its contract with each provider.

Blue Cross appealed the decision, and Aetna insurance company joined it in the dispute. Blue Cross also picked up support from the State Employees Association and the N.C. Association of Educators.

They were opposed by the N.C. Hospital Association, the N.C. Medical Society and a long list of medical specialists.

In the latest ruling, issued Thursday, an insurance department hearing officer said that Blue Cross’ effort to avoid duplicate bills didn’t conflict with any of its provider contracts.

“Rather, it simply ensures that if multiple radiology scans are conducted in the same session, the provider cannot charge BCBSNC for services (such as gowns) that are not actually provided,” the hearing officer wrote.

‘Fight is not over’

The N.C. Medical Society vowed to continue its fight.

“This is unacceptable, and we will continue to stand strongly for the basic principle that when an insurer signs a contract, whether it’s with a doctor or a patient, the expectation is that they will do what has been promised,” Robert Seligson, the medical society’s CEO, said in a statement.

“Perhaps we shouldn’t be surprised that the Department of Insurance agreed that insurance companies can unilaterally break their contract with doctors. Patients and their doctors do not stand a chance if the giant insurance companies can dictate how health services are delivered. We promise you that this fight is not over.”

The state hospital association said it is disappointed in the department’s ruling and is reviewing its next steps.

“Insurers should honor the negotiated terms of their contracts, as the law requires,” the association said in a statement. “NCHA will continue to pursue this issue on behalf of our members.”

Recent months have brought an increased focus on hospital billing in North Carolina. An investigation by the Observer and the (Raleigh) News & Observer found that nonprofit hospitals are inflating prices on drugs and procedures, sometimes as much as 10 times over cost.

In September, U.S. Sen. Chuck Grassley, R-Iowa, asked three of the state’s largest hospitals to share information about their use of a drug discount program, saying they don’t appear to be passing savings along to patients.

N.C. Attorney General Roy Cooper, meanwhile, has said he’s concerned the state’s health care costs are artificially high and that he’s considering whether to use antitrust laws or push for new legislation to reduce them.

Blue Cross dominates North Carolina, with 75 percent of the health insurance market.

“This decision is a win for our customers – who will save $16 million a year in wasteful charges – and it’s a win for North Carolina,” Blue Cross CEO Brad Wilson said in a release. “This will protect consumers and our customers from unreasonable charges.” News & Observer Staff Writer Joseph Neff contributed.

Alexander: 704-358-5060

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