Out of network insurance reasonable and customary insane rate

I need surgery that I am very nervous about. I went on many consults and would like to use an out of network doctor. He takes insurance, just not mine, BC/BS. I called today to find out how much the surgery would be and depending on which way I go, it is $18,000 or $23,000. I get 80% coverage for out of network. When I called the insurance company and gave them the CPT code, they told me the reasonable and customary is $3,000, so basically I will get back 80% of $3,000, so this surgery is going to cost me $15,000 to $20,000. It is an outpatient procedure. How are insurances allowed to do this? They said this is the reasonable and customary rate that drs in the area are charging when that clearly is not true. What can I do?

Message edited 6/28/2013 8:53:04 PM.

Out of network insurance reasonable and customary insane rate

Be sure to ask for all the codes for the surgery. There may be more than one. To my surprise a lumpectomy had three codes and my insurance would have covered 80% of the first and only 40% of the two others. I was furious, but there was nothing I could do about it as it was their policy (The Empire plan). I went to another surgeon who was covered 100%.

Medical billing and insurance payments make very little sense. It's all matter of what arrangements the various doctors and hospitals have with each insurance company. Be VERY careful as you move forward to be sure everything is covered. Ask lots of questions so that you don't get blindsided.

Time magazine did a cover story on medical billing shenanigans about two months ago that you would find interesting. Doctors and hospitals each create a "master charge list" which has all the crazy prices that they use on their bills, but insurance doesn't pay due to contractual agreements. Who pays those prices? People who are out of network and have no negotiating power. They can ask for a reduction, and may get one, but not as much an insurance company would.

A doctor may bill an insurance company $18,000, but because of their agreement, may only get reimbursed $3000 - and be content with it. I just got a lab bill for close to $700 for something, but insurance paid $56 and the bill was considered paid by both. The difference vanished. That's insane.

Message edited 7/2/2013 1:28:12 AM.

Re: Out of network insurance reasonable and customary insane rate

Thank you Sunnyflies. To add to all this, I did research, not sure if I posted on here, but they did an overhaul on the out of network rates to make them better and now they are going by the Medicare rates to determine what the amount is. So now it is worse. I googled and found people that paid $20,000, $30,000 and got back $1,000. Some of the people were from Long Island. It is crazy! Thanks for all your info. There may be other things that I will get claim forms for to submit, but it still might be over what I am willing to shell out of my own pocket. When I mentioned to the insurance rep that this out of network is pretty useless, he said, "well, it is good if you are rich and want to go out of network." I told him, "After spending $18,000 on a surgery, the $3,000 is like getting nothing back."

Message edited 7/2/2013 9:21:31 AM.