Aetna’s Repayment News Points Up Billing Truth: Treatment in Hospitals Costs More

Published Online: August 28, 2014
Mary K. Caffrey
This week’s news that Aetna would be repaid $8.4 million after uncovering a questionable relationship between three clinics and a hospital has its roots in a well-known managed care reality: If you’re treated in a hospital setting, it costs more.

Healthcare Payer News reported that a Texas judge ruled in Aetna’s favor in finding that the freestanding clinics were not part of the licensed entity, Cleveland Imaging and Surgical Hospital, the “relationship” was financial only, as three of the hospital’s owners had shares in one clinic. Thus, the judge ruled, the clinics did not have the right to use the hospital’s billing number and charge hospital rates.

The clinics argued that their relationship with the hospital entitled them to bill at hospital rates for 17 different procedures, even though the clinics themselves were not licensed.

What happened in Texas is the flip side of what is happening in cancer care around the country, however. Community oncologists, unable to withstand dwindling reimbursements from Medicare and the recent federal sequester, increasingly merge with hospitals so that billing can occur at higher rates. Reports abound of the same care suddenly costing more, even though the only change is the name on the door. And this, according to the Community Oncology Association, ends up costing Medicare more money in the end.

The perceived lack of connection between what care should cost and what shows up on the bill has been a topic of growing concern, and is one of the issues that healthcare reform seeks to address. It’s been examined in a series in The New York Times, “Paying Till It Hurts,” which found the average daily cost in an American hospital is $4,000. Both this story and a separate study published last fall found that hospitals’ sheer market power was one of the factors in their ability to charge high prices.

So what of the Texas clinics? Aetna is not finished in court, according to Healthcare Payer News, which reports that accusations of fraud, civil conspiracy and other matters remain. However, one clinic, Premier Emergency Room & Imaging, which had some overlapping ownership with the hospital, has since closed.

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