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Please check out the latest article in Current Events. Blue Cross of California last week sent out letters to physicians requesting they disclose pre-existing medical conditions to the company so they might cancel patient policies. Sounds harsh, but the insurance provider is just trying to eliminate fraud and keep costs down for their members. Is this the right way to go about it? Read my article...I'd like to hear your thoughts.

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I don't think it should be the responsibility of the provider to be the private detective for the insurance companies. Providers are increasingly burdened with paperwork and other requirements just trying to get legitimate claims paid. At some point, the healthcare industry needs to give the providers the time to treat patients rather than fill out paperwork.

While there is fraud in the healthcare industry, I don't think it is common for doctors to code the wrong procedure just to get a claim paid. They simply have too much to risk to engage in this type of behavior.

Unfortunately, I feel that fraud is more common than consumers realize. The amount hospitals, doctors, labs, etc. bill the insurance companies is far more than the insurance companies (or us if we didn't have insurance) can actually pay for whatever service is rendered, because they know they will only get reimbursed for a fraction of it. The costs of doing business in healthcare are prohibitive for all parties involved, and fraud only makes it worse for everyone.

Physicians "bill" an insurance company an amount according to their fee schedule. The amount paid by the insurance company is a contracted amount negotiated by the insurance company. The fact that insurance companies pay the physicians less in order to generate more profit for the insurance company does not represent fraud or abuse by either party. Unfortunately, it is impossible for a physician to negotiate the same contracted amount for each procedure from each insurance company. All physicians would love to have a true free market that is transparent and paid at posted rates. Unfortunately, most often the insurance companies dictate the contracted amount to the physician. They can either take it or leave it. Often there is a considerable variance between insurance companies. When the EOB (explanation of benefits) is sent to the provider, it will list the 'contracted' amount and the provider simply writes off the difference. Still no fraud (fraud implies deception). The physican will receive the contracted amount regardless of the amount billed.

Insurance companies generate enormous amounts of profit (to the tune of billions)in order to provide returns to their shareholders. The insurance company is responsible only to the shareholders. Only to the shareholders....not to the patient/insured....like all publicly owned companies.

Thank you for the information Rhonda! It's interesting to view this subject from a different point of view (that of someone who works in a surgical practice with doctors). I certainly agree with much of what you said, but I feel that insurance companies are not alone in doing it for the money. There aren't many people who go into business not to make a profit, in my experience.

Keeping costs down while turning a profit is a challenge for every participant in the health care system. I certainly don't feel that a lot of doctors are committing fraud to make money off the system. I feel that fraud runs rampant throughout the health care system from many different angles.

I am genuinely curious though, does the doctor know what the contracted rate will be for many common procedures, and if so, why do they charge so much more than they know they will get?

With car insurance, everything is known in a database. You know exactly what the driver record is and then shop for insurance rates based on that.

I think it's very fair for the same sort of database to exist for patients so that the full history is known and you can then shop around to find the very best rates for you. Right now it's all "hidden" and you often get overcharged because they have to assume you're hiding things. I would much rather they know my full record so I can get lower rates Never mind I have always felt that a full national record of some sort would mean I was much safer as I traveled around ...

Google is launching a health care information database with patient records -

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Great points, everyone! Lisa, I like your idea of a national database. It would definitely be a huge step towards lowering healthcare rates. But then, that's where privacy rights come in again. Do you think people should be *required* to disclose their full histories or should it be a voluntary system? I think the only thing that would work is to keep it voluntary, but hopefully enough people would offer up their information that it would make a gradual difference.

Does anyone support universal healthcare?

Good question, Jennifer. Sometimes physicians do know the contracted amount, however, many times they do not. There are many reasons for this and I won't bore you with 'all' of the details but one common reason is that insurance companies will base their contracted amount on a formula called RVU. This formula can be extremely complex, making it impossible to determine the contracted amount prior to billing.

Since the contracted amount is generally dictated to the physicians by the hundreds/thousands of insurance companies, they end up with many different amounts for any one procedure. As a result, they set their billable fee and bill this amount to all companies, knowing that when they receive the EOB from the company they will need to 'disallow' the difference between the billable amount and the contracted amount. The terms 'billed amount' and 'charged amount' are really not interchangeable in this situation.

Here's a good analogy. Let's say that your local grocer has no control over their prices. The north side of town tells them to sell a can of green beans at one price and the south side tells them to sell it at another, and the east side yet another price, etc. And, the west side won't tell them the selling price (the store discovers the price when they ring it up at the cash register). There would be no way for the store to post all of these prices on the can of green beans, especially when they don't know the price.

Physicians didn't create this system, the insurance industry did. Physicians would love to have a transparent market but unfortunately it is out of their control.

Yes, businesses want to make a profit. However, the people getting rich in the healthcare industry are not the physicians. A Forbe's report on 2005 CEO compensation listed the following:

• Aetna - $22.2 million
• United Health Group (United Health Care) - $124.8 million
• PacifiCare - $3.38 million
• Cigna - $13.3 million
• Wellpoint - $25 million

This is annual compensation for one person. I, for one, am glad I live in a capitalistic society, however, when you question what is driving medical costs through the roof you must consider the millions received annually by the CEO's of the insurance companies.

Rhonda, thank you so much for the information! It's good to have a debate on subjects like these and see things from different angles than you normally would.