A PPO in Disguise

There’s been a lot of debate about the new IATSE contract, especially regarding the requirement, in the third year, that members work 400 rather than 300 hours to get six months of coverage. What has gone almost unnoticed is the change in payment for “out of network” doctors. The plan used to pay 70% of the customary rate (more on that rate in a minute). In the new contract it’ll pay just 50%. That makes it a lot more painful to go out of network. Just a doctor visit and a few tests could set you back hundreds of dollars.

The health plan, which used to pay everything promptly and without argument, has morphed into an amalgam of a de-facto HMO (the Motion Picture and Television Fund clinics), and a PPO, Blue Shield of California.

This works fairly well for routine problems. But in special circumstances I’d like to know that I have the option to use any doctor, at a reasonable price. Many of the best doctors are now refusing to sign up with any insurer. The fact that we’ll only receive 50% of the standard rate for those docs seems at least as problematic to me as the new 400-hour requirement.

And regarding those customary rates? It turns out — big surprise — that they’re rigged. The large insurer, UnitedHealth, also owns Ingenix, the company that works out these numbers for the entire industry. This is an obvious conflict of interest and, sure enough, they have just settled with NY District Attorney Andrew Cuomo, who said the industry had engaged in “a scheme to defraud consumers” by systematically underpaying the nation’s medical bills. Details are in this NY Times article.

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