Here’s an interesting story in the LA Times this past weekend that highlights the inefficiencies in our current health system.
Blue Cross-Blue Shield health plans have agreed to pay $128 million to more than 900,000 physicians who charged that the Blues systematically paid them for less expensive procedures than the ones that were performed.
In addition to the $128 million settlement, the physicians will also have about $49 million in legal fees.
Rather than paying $172 million on the back-end, why didn’t the Blues (and other health plans that were initially sued and settled) not pay the right amount in the first place, saving themselves and physicians the expense, energy and stress of going to court.
All that effort that went into fighting over claims could have actually gone to patient care.
This Wall Street Journal article (subscription required) from February that reported insurers and providers were spending an extra $20 billion a year — in administrative costs — to sort out claims need to be re-submitted several times and routinely denied by insurers.
That’s enough to:
- Expand Medicaid to 5 million people nationwide, making a dent in our 47 million uninsured
- Expand coverage to all California children for more than 2 years
- Pay to increase Medi-Cal reimbursements to providers in California for 10 years.