A Routine Denial

By David Marcovitz

When I was a second year medical student, I gave blood at a Red Cross drive and noticed a week later that I had a hard and slightly tender blue spot on my left forearm arm where they had drawn blood.  I described it to my PCP through our online portal, and I mentioned that I’d had a similar occurrence a couple years prior after having an IV during an episode of severe dehydration.  He called me an hour later to suggest I start taking aspirin and see him the next day for what sounded to him like a superficial venous clot.  I still remember that my girlfriend and classmate at the time (who is now my wife) was out on a jog and came running to the library with a small bottle of aspirin that she had picked up on her way at a local pharmacy.  We joked that she had probably saved my life.

I went to see my PCP at student health the next day, and after taking a history and examining me, he decided to order a hypercoaguability panel, a set of lab tests used to diagnose a small number of inherited and acquired conditions that put one at increased risk for having blood clots.  He called me when the results were in to tell me I was “heterozygous” (less severe than homozygous in this case) for a fairly common mutation called Factor V Leiden.  He referred me to a hematologist for further discussion about the condition.

From a financial perspective, things started to get interesting when I received a bill from our student health insurance company stating that I owed $2000 for the genetic test used to diagnose my Factor V Leiden.  I called up the administrator (a separate company) that handled all the claims, and I told them that according to the benefits guide, diagnostic blood tests were covered.  They told me that the test for Factor V Leiden was a “genetic screen” which they did not cover.  That didn’t make sense to me since I believed my doctor had ordered a diagnostic test based on a specific set of signs and symptoms (my PCP would later agree).  But despite my sticker shock, the claims agent didn’t seem to share in my alarm.  I realized quickly in talking to him that denying payment for this test was a very routine thing and that he had nothing further to say about it.  He told me I would simply need to submit an appeal and include a letter from my PCP.

The appeal was submitted and within a few months, a received a new and adjusted bill from the administrator asking only that I pay the usual 10% of the cost for the test – my appeal had been a success.  But what struck me was that I wasn’t asked to pay ten percent of $2000, but rather ten percent of $375.  The hospital wanted $2000 from me for the test, but they only wanted $375 from the insurance company.  I would later learn that these bizarre contracts are common as well.

Indeed, the hum-drum nature of the whole sequence of events for everyone involved but me was like an inside joke that I was woefully on the outside of, frantically calling my parents when I received the initial bill to see if they could help me with the $2000 price tag and later entertaining visions of taking my bill directly to the Dean of my medical school and calling for a press conference.  But the company threw a wet towel on my incendiary plans – this was just a routine denial, perhaps an attempt to save a few hundred dollars here or there – and I was only left to muse that there has to be a better and more transparent way for these companies to bill their clients.


David Marcovitz is a second year resident at the MGH/McLean Psychiatry Residency Program in Boston, MA.

6 Comments on “A Routine Denial

Terry Coughlin
September 2, 2013 at 4:36 pm

Thank you for sharing your personal experience. It is short stories like yours that make the complex health care system and its complexities more relatable and understandable vs. general analyses of “bending the cost curve” or “allowed amounts compared to chargemaster rates”.

You had the time and understanding to challenge and see your appeal through, but I have to wonder to what degree you are in the minority in this type of situation, and how many folks simply either accept the full charge, or, make a initial call to their carrier or plan administrator before giving up in confusion and frustration.

I’m not even sure all the ongoing progress toward health care pricing transparency would have helped in this example, as the focus is largely on the most common electable procedures and services. Maybe the best course would be for more helpful and empowered call centers?

Randy Cox
September 5, 2013 at 4:36 pm

Thanks for sharing David. I had similar frustrations and finally decided that patients sharing pricing with other patients, on a large scale, might be the only way to get prices out in the open. The company I founded does just that, mixing crowd-sourced pricing data with what patients want to anonymously share with each other. Would love this blog’s feedback (https://pricingHealthcare.com).

Diane Siden
September 8, 2013 at 4:37 pm

I have had many of these experiences with medical equipment suppliers charging insurance $310, insurance allows $240 which applies to my deductible so I owe a third party surgicare who supplied umass with a ankle support for my daughter $240 because that is what BC/BS allows for that device. On amazon, its only 80$ and the company finally talked to me stating the manufacturer charges $89.99 for it retail in their database. So if I can get my insurance to back out the deductible then I can pay 89.99 for the product. WHY are the insurance companies allowing 300% profit? Just because mass has forced healthcare and they assume insurance will pay? Why does insurance allow that kind of profit margin if they have to pay out? I dont understand this whole unethical retail price versus the insurance’s contract price. I hate new laws, but this one should be added: one price for insurance company same price for patient. Ive tried to talk to reps and DC rep about this talked to their offices, no return, no concern. They are in insurance pockets, so they wont ever make a law to change anything or establish new rules. Division of insurance passes buck to BC/BS policies are approved. No issue. But nothing is in patient or consumer protection law for patients to get same price or lower than insurance companies for uncovered expenses. No one cares out there.

Allan Murphy
September 12, 2013 at 4:36 pm

The real problem here is that the medical student and his doctor are not robust people. Their shared overwhelmingly most visible characteristic is anxiety. Has neither ever had a bruise?When the “right thing to do” is to medicalize every minute aspect of life medical costs will be high

Sean Parnell
September 23, 2013 at 4:38 pm

Unfortunately this is very common in healthcare, particularly any time a hospital is involved, because of the so-called ‘chargemaster’ price system in which nobody but the uninsured get hit with wildly inflated ‘list’ prices. Here’s another example, a man who had what is called fixed-benefit insurance (similar to health insurance, but gives a lump-sum directly to the patient to pay for care) and needed hernia repair surgery. The Hospital told him the price was $23,000: http://theselfpaypatient.com/2013/08/22/fixed-benefit-insurance-policies-an-alternative-to-comprehensive-insurance/. Fortunately another hospital gave him a real price, less than $3,000 including surgeon’s fees.

Insane. Price transparency is a good goal, but it’s meaningless unless those prices are real, not essentially fictitious numbers.

September 24, 2013 at 4:38 pm

David’s story is, sadly, not uncommon at all.

This is because our present system is one in which prepaid care via a third party (private or public) masquerades as insurance and one in which health care costs are measured largely by the price of insurance premiums, not by the true cost of rendering care directly. Here is the irony: It is these same high premiums that keep costs high because it is the tool that finances them! It is a racket folks; kind of like a mob boss that tells the business owner what to charge his customers, limits competition and then takes the profit off the top!

Then there is a less dramatic, but just as revealing story of my cardiology bill. I had a high deductible plan with an HSA(health savings account) at the time of my visit to the cardiologist following an ER visit the day before for some atypical chest symptoms. I had a thorough evaluation including about 30 minutes with the cardiologist, an EKG, Echo, and a stress cardiolyte nuclear scan. My total bill was just shy of $1,900. After the EoB cycled through and the “allowable charges” were discounted the bill came down to $1,310. Not too bad. So, once I received my EoB with final amount owed, I called the cardiologist’s office and asked them if the offered any cash discounts for high-deductible or uninsured patient. The response was “yes, if you pay half then we pay half”. I asked her to clarify and basically if I paid 50% then they wrote off or zeroed out the remainder.

So basically my $1,900 bill turned into $655. Viola! The real cost of care! It really reflects just how inflated prices have become and how disconnected the billed charges are from the true cost of rendering care.

This is why moving away from, not toward, more third-party paid care is the solution. Focusing on “coverage” rather than a cost-effective primary care model, is what has got us into this mess in the first place. Trying to make coverage “affordable” by using someone else’s money to subsidize it creates an illusion of affordability. It also kicks the reform can further down the road for someone else to deal with while enriching the Government-Medical industrial complex that stands to benefit from maintaining the status quo.

How do we get to price transparency and restore financial sanity to the HealthCare market?

1. Believe in the sovereignty and good judgment of the individual patient to seek care as they see fit at a transparent price and in the absence of insurance network constraints.

2. Understand that quality medical care starts with an unencumbered Doctor-Patient relationship.

3. Acknowledge that a doctor serves their patient’s needs better if they work directly for the patient, and not within the constraints, mandates or barriers of a provider contract with a third party.

4. Realize that only by creating free-agents of both physicians and patients will we bring together the stakeholders for a meaningful exchange of value, thus substantially lowering medical costs in the outpatient arena.

5. Acknowledge that the main driver of health care costs in the outpatient arena is not malpractice costs, but rather expensive third party prepaid policies that utilize “first dollar” benefits for virtually any physician interaction, regardless of how minor.

6. Realize that to gain control of spiraling medical costs in the U.S, that health plan “coverage” needs to become a true “insurance” policy such that it only insures unexpected losses that we otherwise couldn’t afford on our own.

7. Embrace the concept that health insurance works best when it is portable, personal, private and not linked to employment, nor zoned by networks. This approach would allow insurance policies to be tailored to individual needs, cut down on the number of uninsured due to job changes and other life events, thus obviating the need for expensive COBRA coverage.

8. Understand that the true costs of medical care is much lower than that reflected by the cost of a co-pay based health insurance policies offered in the workplace today.

9. Embrace the economic realization that only by creating free agent of physicians and patients will the economic forces of supply and demand exert their desired effect, thus determining the fair market value of routine medical services.

10. Empower the idea that better informed consumers make better patients and unrestricted patients make better consumers.


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