Insurers Charge Local Governments Extra Fees for Employees Seeking Out-Of-Network Care 

By Consumers for Quality Care, on November 13, 2024

Health insurance companies presented local governments with a program that claims to control costs associated with employees that seek out-of-network care, but in fact unexpected fees and charges unexpectedly balloon, according to an investigation conducted by The New York Times. 

The charges for administering these programs have thrown off what local governments budget for their health care insurance plan, forcing them to cut other parts of their municipal budget. Sometimes, the fees incurred by the health insurer to cover the out-of-network procedure cost more than the actual procedure, defeating the whole point of the “cost containment” rationale.  

For insurers, however, these programs are big money-makers. UnitedHealth alone makes more than $1 billion from these fees, providing “significant revenue” to the company. Insurers like UnitedHealth work with a company called MultiPlan to help administer this program, and MultiPlan uses an algorithm to determine a fair payment. To the employee, they show the amount of the original bill and what is ultimately paid, which is reported as a savings to the employer. A percentage of these savings goes towards the program’s fees. The lower the payment, the greater the savings, and the higher the fees.  

These programs are so convoluted and opaque that many governments are unaware of the associated fees, and even if they are, they often have no choice but to reluctantly pay them.  

CQC urges health care systems to stop charging absurd fees and urges lawmakers to combat this and other practices that increase costs for taxpayers and health care costs for consumers.