On the Funding of Endometriosis Surgery
As many of my readers know, I spend a fair amount of time online. I love interacting with other docs that do what I do, and even more so, I love interacting with women that have the conditions that I treat. Even though I have left academics, I am a teacher at heart, and enjoy the opportunity to pass on what I have learned when I can.
One of the biggest questions I see is about how endometriosis care is paid for.
Unlike typical care, many endometriosis physicians are not under contract with insurers for care. This creates a whole different system for payment of medical care that is confusing to many patients – so let me explain it here.
The first issue to understand when figuring out how to pay for endometriosis care is the idea of “in network”.
An “in network” provider, whether that be a doctor or a facility, has entered into a contractual relationship with an insurer to provide care for its members. When caring for those members, each service that physician provides is given a value that has been pre-negotiated between the provider or facility and the insurance company. In this relationship, charges are irrelevant, because if the doctor or facility charges more than the contractually agreement payment amount, the contracted rate is the only one that matters. Typically, the insurer has negotiated fairly low payments for services in return for putting the doc in the network, which presumably will drive a lot of patients to them.
When a patient seeks care with an “in network” provider, they are part of a three way relationship – the patient, the provider, and the insurance company. The doctor or facility provides the service, sends in the proper codes for what was done, and the claim is then priced by the insurer based on previously contracted rates. The patient is then responsible to pay a part of that charge. The amount they have to pay depends on their deductible, their co-insurance rate, and their out-of-pocket max of their policy. If a patient seeks surgery with an ‘in-network’ provider and they have already met their deductible, they may have very little more to pay. And even if the patient hasn’t gotten any medical care that year, the most they will be responsible for is their annual ‘out-of-pocket maximum’.
An “out of network” provider, or facility, is a different kind of entity that has chosen to not be under contract with an insurer. When a patient gets care from and “out of network” provider, they have a financial relationship with that provider that has nothing to do with the insurance company. The provider provides care, and sets their charges. The patient is responsible to pay those charges in their entirety. The patient may also have a relationship with an insurance company, and if they have ‘out of network’ benefits, the insurance company will reimburse the patient for, or in some cases directly pay for, a portion of the charges billed by the physician. Importantly though, in this relationship the patient is responsible for the charges even if the insurance won’t pay all the bill, or any of it at all. Typically, “out of network” providers and facilities will bill insurance as a courtesy to the patient, and may be willing to accept only partial payment for services until it is determined how much the insurance is going to pay.
A third kind of provider is a “cash only” provider. They are “out of network” providers, but they do not submit insurance claims for the patient. The doctor or facility sets their charges, and the patient pays them. If the patient wants to get an ‘out of network’ payment from the insurance company, they will need to take the bill from the physician and submit them to the insurance company themselves.
The frustrating thing for patients seeking care for endometriosis is that most of the endometriosis experts in the country are ‘out of network’, and they have fairly high charges for their services. The experts do this for a number of reasons. One reason is that they have put a lot of time into developing their skills, and seek to set their prices at a level that the market will support. From a point of view of pure economics, there are enough patients having difficultly with endometriosis who have enough money to pay their fees that there is no reason for them to charge less. To some, this may seem somewhat greedy. But the truth is that running a busy endometriosis practice requires significant overhead with multiple paid staff and facilities, and high charges are well justified in many cases. But there is a second reason as well. For a physician to be ‘in network’ for endometriosis care they have to accept whatever insurance companies will pay them for their surgical services, and by and large, the insurance companies pay very poorly. There are no codes that adequately describe the amount of work it takes to resect endometriosis. Unfortunately, this leaves a physician who does four hours of resection with the same codes as a physician that does 30 minutes of ablation. Both get paid the same, though the work is completely different, and the education and experience required to do the complex surgery is completely different. Effectively, an ‘in network’ endometriosis expert is paid nothing for their expertise, treated just like any other obstetrician gynecologist doing a laparoscopy. As since a surgeon doing complex surgery can’t do as many cases as a surgeon doing easy surgery, the less experienced surgeon actually makes more money than the expert surgeon.
The good news for patients is that despite the inequities of in-network reimbursement for expert physicians, there are still some of them to be sought out. Many of them work for large hospitals who don’t really care that their expert physician brings in less money than they are paid in salary because the hospital makes so much money on the back-end for the facility fees from the physician’s surgery. Essentially they pay the doc to be on staff so they bring in the surgeries, and for the hospital the net profit from the surgeries more than makes up for the net loss from the physician’s salary.
This was my situation when I was at Emory, where despite being booked out for months on my operating room schedule caring for extremely complex cases, I got a production statement every year that said I lost between 50 and 100 thousand dollars a year for my department. The reality of this taught me that in the absence of a large institution to support my practice, a full-time practice as an ‘in-network’ endometriosis physician was not a feasible enterprise.
So now that I operate in private practice at Pearl Women’s Center in Portland, OR, am I ‘out of network?”. The answer is no – I am actually ‘in network’ for most insurers. But we still make it work – we have a different solution. Just as the hospital is able to subsidize the salary of their physicians with the facility fees that their procedures generate, we are able to subsidize our operation by operating in our own facility, generating income from our facility fees as well as by the relatively small professional fees. And so for now, I am one of the fairly rare people in this country who is willing to do a complex endometriosis surgery for ‘in-network’ fees.
Will this last forever? Not sure. There is a certain allure to just setting fees and having them paid, and obviously there is a potential to make more money this way. But there is sad flip-side to this, which is that it prevents women of lesser means from getting the care I can provide. To be honest I still can’t take care of everyone. My practice overhead prevents me from doing care for medicaid patients, and our surgical facility is still ‘out of network’ for some insurers who refuse to pay a reasonable rate for the use of the facilities. But going completely out of network really limits one to caring only for those who can afford to pay very high fees, and at this point this isn’t what I have chosen to do. But to those who have, I can’t blame them. They have cultivated tremendous skill through years of dedication and work, and they charge what they think what they are worth. And they are worth it. Its just that not everybody can afford to pay it.
So is there anything a patient can do if they need to see an ‘out of network’ endometriosis expert? Sometimes there is. In some cases patients have effectively appealed to have their insurer treat an ‘out of network’ expert as an ‘in network’ physician, making an argument that there is no physician of adequate expertise within the network. This is difficult, as the idea of an ‘endometriosis expert’ is not something that is universally accepted. But some have been successful at this.
Hopefully this post is helpful to the thousands of patients trying to figure out the finances of their endometriosis care.