The Association of U S West Retirees



Healthcare hassles
Helena woman’s struggles with insurance company over $17,000 bill highlight complicated world of insurance ‘provider networks’ contracts
By Mike Dennison
Independent Record State Bureau
Sunday, September 2, 2007

Nancy Davis went to the only hospital in town this spring for hip-replacement surgery, having had the procedure pre-approved by her health insurance company.

But two months later she received a $17,000 bill from St. Peter’s Hospital, which said the insurance company had declined to pay, because it didn’t have a “contract” agreement with the Helena hospital.

“That was when I said, ‘You’ve got to be kidding me,’ ” Davis recalled.

The company is United HealthCare, the largest private health insurer in the nation.  A week ago, United HealthCare paid most of the bill — but not before Davis spent many hours over several weeks on the telephone, questioning United, its contractors and the hospital about what had happened.

As of Friday, Davis still hadn’t received word from United or its surrogate that the bill had been paid.

She found out Wednesday from a Lee Newspapers State Bureau reporter, who had been working more than two weeks on a story about her case.  In response to inquiries from the reporter, the insurer and the hospital last week revealed that final payment was made August 24.

Davis said she’s glad United HealthCare agreed to pay what she thought was covered, regardless of the status of any “contract” with the hospital.

But she doesn’t see why anyone should have to spend hours on the phone to enforce their own health insurance policy.

Davis, who has health insurance as a retiree of Qwest, the telecom giant, said she also knows of other Qwest workers who’ve run into the same problem and ended up fighting to have United pay bills from the only hospital in Helena.

“You’re telling me that each patient is going to have to go through all the same hoops?” she said.  “Every person shouldn’t have to go through this frustration and anxiety.  That’s absurd.  This should have been (settled) months ago.”

A United HealthCare spokeswoman said the process worked how it should.  A subcontractor reviewed what it thought might be a too-high charge and United eventually paid the bill, said Cheryl Randolph.

The only error was made by the hospital, which sent Davis the bill “prematurely” before the review process played out, she said.

“Sometimes things take longer than we’d like,” Randolph said.  “At the end of the day, (the bill) was paid.  If the hospital had never sent her a bill, this would have been a non-issue.”

If nothing else, Davis’ tale is a $17,000 example of the thicket of insurers, “provider networks” and contracts that must be navigated before money is paid for health coverage.

Davis, 54, scheduled her hip-replacement surgery in May, and said she spoke twice with a United HealthCare nurse beforehand to make sure the surgery was pre-approved by the insurer.  At no time did the nurse or anyone at United HealthCare say anything about not having a contract with St. Peter’s, she said.

A month after being released from the hospital, Davis received a letter from Concentra Preferred Systems, a Texas firm hired by United to negotiate bills from providers not under contract with United.

The June 7 letter said Concentra had determined that the “reasonable and appropriate amount” for the surgery is $8,600, rather than the nearly $25,000 that St. Peter’s had charged.

It said the hospital might bill Davis for the remainder, and that she should contact Concentra should that occur.

St. Peter’s did send Davis a bill for $17,000, which included the $900 that Davis thought was her share of the bill and the $16,000-plus difference that United hadn’t paid.

On Aug. 4, Davis received a letter from Concentra saying St. Peter’s wouldn’t reduce the charge.  The company said it would take the charge back to United HealthCare for possible payment, and that the review could take six to 10 weeks.

Meanwhile, the hospital was telling Davis she owed $17,000, and would have to make some payment to keep her credit in good standing.  She agreed to pay $100 a month.

Randolph said last Wednesday that United HealthCare had decided by Aug. 16 that the claim would be processed.  St. Peter’s Hospital received a $16,000 payment on Aug. 24, leaving $940 to be paid by Davis.

Randolph said the quick resolution of the case had nothing to do with inquiries by the Lee Newspapers State Bureau, which first contacted United Healthcare about the case the week of Aug. 13.

United HealthCare, like many health insurers, arranges contracts with health-care providers such as hospitals.  The provider agrees to a discounted price for their services, and United includes them in its network, sending patients to these providers.

However, United does not have a contract with St. Peter’s Hospital or several other major Montana hospitals.

John Solheim, chief executive officer at St. Peter’s, said the hospital has been negotiating with United for two years, but has yet to reach an agreement.

“United can enforce much more strict parameters on their clients when they negotiate a direct contract,” he said.  “That’s how they make their money.”

While United has no contract with St. Peter’s, it has had an agreement with First Health Group, a managed-care company that sets up “provider networks.”  First Health arranges discounts with certain providers, and then sells access to those providers and the discounts.

First Health has had a contract with St. Peter’s for the past decade, but that contract lapsed last December and wasn’t renewed until July 1 this year, hospital officials said.  Davis had her surgery on May 1.

Randolph said since United had no contract agreement with St. Peter’s at the time of the surgery, it hired Concentra to negotiate “affordable payment for the services provided.”

How Concentra initially decided that $8,600 was adequate payment is unknown.  Hospital documents show that the cost of hip replacement surgery at major Montana hospitals ranges from $19,500 to $26,500.  The cost to the hospital of buying Davis’s hip replacement hardware alone came to $9,600.

Randolph did not respond to a request on how Concentra calculated the “reasonable and appropriate amount.”

As Davis wrestled with whether United HealthCare would pay its share of her hip replacement surgery, she also was preparing to have carpal-tunnel surgery on each of her wrists.

This time, knowing United didn’t have a contract with the hospital, she asked the insurer in advance what it would cover.  She ended up having the surgery Aug. 23 at the Helena Surgicenter, which is not associated with St. Peter’s, but which also has no contract with United Healthcare, Davis said.

Davis said she spoke with a United official earlier by telephone and asked for the “reasonable and customary” amount that would be covered.  She got a number — $1,432 per wrist — and asked to have that statement in writing.

That was three weeks ago.  She said as of Thursday, she hadn’t received it, and hopes she won’t have to go through the same hassle again.

Editor’s note: Davis waived her privacy rights specifically to allow the hospital and insurance firms to talk to the Lee Newspapers State Bureau about her case. No privacy laws were violated.