When Doctors Tax You For Having Insurance

By Trisha Torrey, About.com Guide January 7, 2012

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We all sat up and took notice when Verizon announced it would be charging $2 a month so customers could pay their Verizon bills. Seemed like the epitome of audacious - and not surprisingly, it took only about 24 hours before the uproar from customers made them decide to back down from their plans.

But that $2 fee is nothing compared to the surprise some patients are getting. That is, they are receiving bills from their doctors for $350 a year, payable if they expect their doctor to work with their insurance company.

Say wha-a-a-t?

Sure enough. There are now doctors who are billing their patients hundreds of dollars in fees if the patient expects them to bill the insurance company. And, according to this article in the LA Times, the practice is growing.

I have to say I see nothing right about this. Nothing at all. When we Americans contract with our insurance companies, those insurers agree to pay the doctor's bill. Granted, we have co-pays for each service rendered. But this billing fee isn't a co-pay. It's a tax.

I do see that it's a perfect example of how dysfunctional our American system of healthcare has become. And a perfect example of follow the money.

And yet - I am a business person, too. So I also understand why doctors, as business people, are doing it. It actually makes perfect sense. It's because the hoops they have to jump through to be paid by our insurers are so onerous, that they are losing money. For some, it may mean the difference between keeping their practice doors open, or having to go out of business.

What hoops, you might ask? Here are a couple of examples:

Up until a few years ago, if you needed a test or a procedure, then it was scheduled, you had it, the doctor billed for it, and the insurance company paid for it. With few exceptions, that's not the case today. Today, if you need a test or procedure, then someone from the doctor's office has to call and get permission for you to have it. With no permission, it doesn't get paid for - and not only will the doctor not get the money from the insurance company, but YOU will have to pay for it out of your pocket. That is why you sign all that paperwork that says you'll be responsible for anything that's not covered.

Up until a few years ago, if your doctor referred you to another doctor, then your referring doctor would simply pick up the phone, make the referral, send over the records and you would meet with the new doctor. Today it's not so simple. To make a referral, your doctor (or more likely her staff) needs to call the insurance company, get permission for the referral, choose from the approved doctors, wait for paperwork with that permission, then contact the new doctor.

Those very routine, usually quick services now cost your doctors' offices hours and hours of time - and paychecks for the extra people it takes to get all those extra permissions, juggle all those extra steps, shuffle all those extra papers.

And so, no matter how wrong it seems, no matter how unfair it is to patients - the cost of all that extra service is getting passed on to us. One more perfect example of the greediness of insurers at the expense of their customers - patients.

If you receive one of these bills from your doctor, then there are only four solutions I can think of:

1. Pay the bill.

2. Change doctors. Find one who doesn't bill you for working with your insurance company.

3. Pay cash for your doctors' services and then get reimbursed yourself from your insurance company. (For primary care, just paying cash for a higher level of service is possible with a concierge or boutique doctor practice.)

4. Move to a country where the government pays for healthcare and patients don't suffer through this kind of nonsense.