Unsavory business practice or completely acceptable?

[anonimommy]

I had a homebirth with a midwife. She gave me the option of having her biller bill my insurance company. I have a PPO plan and was thrilled to have a homebirth be affordable to me. Her set fee was $3,000. She asked for a payment of $1,000 by the 36th week of pregnancy and talked of a refund in the event that my insurance company paid her more than $2,000. Her biller nickled and dimed the insurance company and my midwife received $3,300 from them. She is now saying that because the insurance company assigned us to pay $1,200 that she does not owe us a refund and she'll "let" that $200 slide. I looked at our financial contract and there is a paragraph about deductible and client responsibility as assigned by insurance company that I guess I didn't notice when we signed it.

Is it common for midwives to collect more than their fee from insurance companies and keep the money that clients paid?

[womenswisdom]

I'm not sure, but I think you might have a problem with insurance fraud (on your part) if your deductible was $1200 and your midwife then paid you that amount out of her fees.

[anonimommy]

womenswisdom - I notice your sig indicates that you a birth professional. Have you heard of midwives having such contracts? She explained it so simply that I feel like it was a bit of bait-and-switch tactic. My responsibility was part deductible and part assigned responsibility due to coinsurance.

[MidwifeErika]

It is considered completely acceptable for you to be considered responsible for the co-insurance and deductible of your plan. In fact, it would even be acceptable for her to balance bill you for the additional $200 your plan stated you were responsible for. It sounds like the real issue here was miscommunication between you and your midwife on how all the insurance stuff works. I would let her know how you understood things to be so she can see if she needs to reword the way she speaks about insurance to people so that her policies are very clear from the beginning. It sounds like it was in writing, but maybe just the words didn't communicate well.

[CorpusMom]

From my experience in dealing with insurance it's like this. Your deductible is $1200 and your are responsible for paying the first $1200 that get billed to your insurance. Your insurance will pay out to the providers the total allowed minus the $1200. So, if your midwife was the only provider, the insurance company paid her $2100 (the $3300 allowed minus your $1200 deductible). Does this make sense?

I have a high deductible, $5000, so, I have to pay out the entire deducltible before my insurance company pays any of my providers. The providers submit claims to the insurance company, the insurance company tells them how much of that claim is considered allowable and I am billed for this allowable amount until my deductible is met. After my deductible is met the insurance company pays the allowable amount to the provider.

[Nicole730]

I can tell you that after our insurance paid our midwife, she did give us some of our money back.  She is paid on a sliding scale and without insurance we would have paid $2800.  She charged the insurance company $3800.  Our deductible was $1000 and we got $800 back from the midwife.  I would have been upset if she hadn't given us any of our already paid money back.

[lunarlady]

I find it unsavory because clearly she sent a bill to your insurance for far more than $3000. Maybe $5000 or so. So instead of the $3000 she told you would be owed for her fee, she is actually receiving $4300. A very large difference! I am sure if you look at your insurance forms you will see charges that far exceed the $3000 quoted. I know it is commen practice for all medical billers to nickel and dime insurance companies for every little thing in hopes of receiving fair payout, but this seems off to me. Either she wants $3000 or she wants $5000 for her services. Any amount paid in excess of her fee should be returned to you.

For what it is worth my MW also used a biller, and sent charges to my insurance for over $6000 in fees. My insurance paid out about $1800, almost all of which was returned to me since I had paid my MW almost her full fee of $2900 before the birth. She totally ignored the amount my insurance said I was to be charged ($4200) since that was not what we agreed on although it is reasonable and customary fee for labor and delivery. This is not insurance fraud. A provider can choose to waive the amount owed to them if they choose to do so. This is a commen practice at doctors, dentists, and chiropractors when they submit claims that are not paid in full. They waive the amount you owe that is over your copay in order to keep your business.

[anonimommy]

Quote:

Originally Posted by CorpusMom 

From my experience in dealing with insurance it's like this. Your deductible is $1200 and your are responsible for paying the first $1200 that get billed to your insurance. Your insurance will pay out to the providers the total allowed minus the $1200. So, if your midwife was the only provider, the insurance company paid her $2100 (the $3300 allowed minus your $1200 deductible). Does this make sense?

That is not true in this sitation. The amount of money they paid the midwife was $3,300. I added it up from each individual claim. Part of the $1,200 was my deductible and part assigned patient responsibility (I neglected to mention that in my initial post).

Originally Posted by MidwifeErika 

It is considered completely acceptable for you to be considered responsible for the co-insurance and deductible of your plan. In fact, it would even be acceptable for her to balance bill you for the additional $200 your plan stated you were responsible for. It sounds like the real issue here was miscommunication between you and your midwife on how all the insurance stuff works. I would let her know how you understood things to be so she can see if she needs to reword the way she speaks about insurance to people so that her policies are very clear from the beginning. It sounds like it was in writing, but maybe just the words didn't communicate well.

She explained the financial arrangement verbally without any mention of deductible or patient responsibility. Just "this is my fee and I'll refund you if I get enough from the insurance".
 

Originally Posted by lunarlady 

I find it unsavory because clearly she sent a bill to your insurance for far more than $3000. Maybe $5000 or so. So instead of the $3000 she told you would be owed for her fee, she is actually receiving $4300. A very large difference! I am sure if you look at your insurance forms you will see charges that far exceed the $3000 quoted. I know it is commen practice for all medical billers to nickel and dime insurance companies for every little thing in hopes of receiving fair payout, but this seems off to me. Either she wants $3000 or she wants $5000 for her services. Any amount paid in excess of her fee should be returned to you.

For what it is worth my MW also used a biller, and sent charges to my insurance for over $6000 in fees. My insurance paid out about $1800, almost all of which was returned to me since I had paid my MW almost her full fee of $2900 before the birth. She totally ignored the amount my insurance said I was to be charged ($4200) since that was not what we agreed on although it is reasonable and customary fee for labor and delivery. This is not insurance fraud. A provider can choose to waive the amount owed to them if they choose to do so. This is a commen practice at doctors, dentists, and chiropractors when they submit claims that are not paid in full. They waive the amount you owe that is over your copay in order to keep your business.

She billed my insurance company roughly $7,000.

[Bekka]

Apparently it is very common for health care providers to have a "cash amount" vs. an "insurance amount."  The difference can be quite large and it has never sat quite right, but in the defense of the health care providers, if they get the money up front, they *have* the money.  If they have to wait 3 (6, 9) mos, then it isn't in their pockets for a long time.  We paid up front and then were reimbursed up the the amount we had paid.  We got most of what we paid back except the deposit and my deductible ($1000); she got more from the insurance company.  I spoke with other HCPs and it's very common.

I don't know if I think it's right; it may just be the "unsavory business practice" of the HCPs having to work with the insurance companies and jump through their hoops.  It's common in my area.

[anonimommy]

Originally Posted by Bekka 

Apparently it is very common for health care providers to have a "cash amount" vs. an "insurance amount."  The difference can be quite large and it has never sat quite right, but in the defense of the health care providers, if they get the money up front, they *have* the money.  If they have to wait 3 (6, 9) mos, then it isn't in their pockets for a long time.  We paid up front and then were reimbursed up the the amount we had paid.  We got most of what we paid back except the deposit and my deductible ($1000); she got more from the insurance company.  I spoke with other HCPs and it's very common.

I don't know if I think it's right; it may just be the "unsavory business practice" of the HCPs having to work with the insurance companies and jump through their hoops.  It's common in my area.

She did have a cash amount. It was a couple hundred dollars less but I don't recall the exact number. She mentioned that she has to pay the billers so I completely understand having the different amounts. Also since we did prepay an amount (not the her entire fee), I would assume that the amount she had prepaid was enough to cover her business costs so it wasn't like there wasn't any money in her pocket.
 

[mwherbs]

Since it was spelled out in the contract, i agree with Ericka that it seems that she didnt state that clearly, and should be told . What if your part of the deductible was say 800$ she probably would have reimbersed you the $200. Actually there are rules ,atleast in some states , that prevent patients from profiting from health insurance claims, so that $200 dollars she let slide as part of your deductible would be illegal.
Generally midwifery costs can be 50-70% of their fees, add to that a biller who charges maybe 5 % maybe more. So the biller who charged out 7000 to insurance would have gotten 350$ at 5% .

How long did she have to wait for reimbersment? Regionally a year is common, also I know midwives who charge their entire fee out of pocket and clients can work with a biller who will for her %fee try and recover monies paid out. Because floating costs until doubtful amounts of reimbersment rolls in can be too much stress....


So if she billed it at 3000$ they may have given her about 1600$ so at that amount you would still owe her $400....
Edited by mwherbs - 9/4/11 at 11:29pm

[kathrineg]

Call the insurance company and ask. 

Many insurance companies have policies against this.

Personally, I think it's unfair to bill you and the insurance company and end up with more than her fee--frankly, I think it's greedy.

[MidwifeErika]

Originally Posted by kathrineg 

Call the insurance company and ask. 

Many insurance companies have policies against this.

Personally, I think it's unfair to bill you and the insurance company and end up with more than her fee--frankly, I think it's greedy.

I think it is pretty normal. My daughter goes to therapy and for self-pay the fee is $70 per visit. For insured the fee is $175 per visit. We had to decide for us what would be more beneficial, to have them bill insurance and pay more out-of-pocket per visit but use up our deductible or to just do the cash pay. I guess another option the OP would have if she felt this was all unethical was to give back 100% to the insurance company of what they paid, but then turn around and cash pay the $3000 to her midwife. Or she could ask her insurance if they feel it is ok for her to get a payment from her midwife for portions of her bill they determined were her responsibility. Had the midwife's biller only billed the insurance the $3000 then the OP would likely owe her midwife a whole lot more money than the original amount she paid, which would stink too.

Insurance billing can be such a pain in the butt. I just have to put that out there. It is a hassle and it sucks to have people get mad at me for what their insurance covers or doesn't cover. It sucks to have to wait for 9 months for payment. It sucks to spend hours at the computer trying to bill for each person. I can see why there are many midwives who simply do not bother and just make everyone pay 100% in cash.

[APToddlerMama]

Originally Posted by anonimommy 

I had a homebirth with a midwife. She gave me the option of having her biller bill my insurance company. I have a PPO plan and was thrilled to have a homebirth be affordable to me. Her set fee was $3,000. She asked for a payment of $1,000 by the 36th week of pregnancy and talked of a refund in the event that my insurance company paid her more than $2,000. Her biller nickled and dimed the insurance company and my midwife received $3,300 from them. She is now saying that because the insurance company assigned us to pay $1,200 that she does not owe us a refund and she'll "let" that $200 slide. I looked at our financial contract and there is a paragraph about deductible and client responsibility as assigned by insurance company that I guess I didn't notice when we signed it.

Is it common for midwives to collect more than their fee from insurance companies and keep the money that clients paid?

So if her set fee was 3k, then she should have billed 3k to insurance and if they didn't pay it, you would have to cough up $2k more.  And if they did pay it, then you would have a deductible and c-insurance if applicable. If your deductible and co-insurance would have been less that 1K, I would totally go after her for the difference.  If she did not tell you that she would bill insurance differently than you if you ended up private pay, she should have never billed them more either.  It is a common practice WHEN you know about it up front. This happens at my chiropractor's office.  The midwife's practices are totally shady.   She could get in trouble for insurance fraud if she is kicking back more to you than the deductible.   

However, if she told you that she would refund you if insurance paid more than 2K$, and she chooses not to, she is breaking her contract with you.  You might want to talk to a lawyer because it is kind of complicated.   
 

[MidwifeErika]

Originally Posted by APToddlerMama 

So if her set fee was 3k, then she should have billed 3k to insurance and if they didn't pay it, you would have to cough up $2k more.  And if they did pay it, then you would have a deductible and c-insurance if applicable. If your deductible and co-insurance would have been less that 1K, I would totally go after her for the difference.  If she did not tell you that she would bill insurance differently than you if you ended up private pay, she should have never billed them more either.  It is a common practice WHEN you know about it up front. This happens at my chiropractor's office.  The midwife's practices are totally shady.   She could get in trouble for insurance fraud if she is kicking back more to you than the deductible.   

However, if she told you that she would refund you if insurance paid more than 2K$, and she chooses not to, she is breaking her contract with you.  You might want to talk to a lawyer because it is kind of complicated.   
 

Except that it sounds like in writing (the midwife's contract), this was all explained better and correctly. Always, always, always go back to what is in writing.
 

[APToddlerMama]

Originally Posted by MidwifeErika 

Except that it sounds like in writing (the midwife's contract), this was all explained better and correctly. Always, always, always go back to what is in writing.
 

OP--Does the financial contract state that the charge will be 3000?  And that it is subject to deductible and co-insurance?  Or was the 3k just something she mentioned separate from your written contract? 
 

[kathrineg]

The insurance company can explain to you what they were expected to pay and what she was expected to pay. 

They have very specific rules about billing that apply if she takes your insurance. No matter what the contract with you says, if she agrees to take your insurance she agrees, with both you and your insurance company, that she will follow their rules about copays, deductibles, billing, etc. 

Insurance sucks, but if she chooses to take it (and therefore get a wider range of clients and more money) then she needs to abide by their rules. Otherwise, her clients will end up paying for their insurance and paying her a ton of money, too! That is really not fair.

[mwherbs]

Actually there are general rules and laws that govern insurance companies and policies having to do with providers and billing, insurance company decisions are not LAW, contracts with insurance companies between a provider and itself is a different thing. , HMO providers that sign contracts with insurqnce companies agreeing to bill what ever their approved amounts are, this is price fixing from the outside, and has to do with group barganining and volume practices. part of how you only get 5 minute apointments with docs and CNMs. They also tend to pay a small stipend to providers for each insurance policy holder they have as active patients, I think our doc gets $5/month because we are on his books, over and above any apointments.
Since this midwife was paid out of a PPO different rule, insurqnce approves whqt ever part of the bill they deem reimbersable and at a rate they feel like paying. Any left over as well as a co-pay would be clients responsibility, and that is usually spelled out in the insurance.
We had an HMO and still ended up paying out of pocket more than their stated co-pay limit, so even with HMOs you can have hidden or unexpected costs.... Loopholes, loop holes. So insurance companies do not get to dictate what a provider charges, just what they think is reasonable to pay.
There are some exceptions mostly having to do with medicaid.

[Alenushka]

This is fraud, plain and simple.

You can sue her in small claims court. People did that to Sage Femme in SF and won!

[mwherbs]

Not fraud plain and simple. As there is an established practice by all providers to charge insurance carriers differently than cash paying clients, sometimes it is a discount and sometimes it is an added cost. And if there was a suit it would be first the patient has to reimberse the insurance company of any services the provider double charged for or did not do and charged for and then they cwn go after her to be paid back for the losses they incurred by refunding money paid out on their behalf. My parents turned in some California docs who double billed services and had to pay the insurance company back themselves and then re-coupe from the same docs the monies paid to them by the insurance company.... If there is a copay amount stated by the insurance company, then only amounts that a client pays out more than that co-pay would be refundable.
You can get a hold of an insurance commisioner in your state and find out. The thing is that they can audit, and ask if services provided were true services... Did the midwife charge for anything she didnt do? On the face of it it sounds like she itemized the bill rather than did global billing, which can be acceptable and if there were any extra charges like change in health status and response to that, like treating UTI would be an additional bill on top of typical global healthy pregnancy billing. So even a normal contract only covers totally normal and heathy and any extras like ongoing glucose monitoring or gestational hypertension, non- stress tests, prematurity, postdates... All these things would fall outside the normal care contract and have addiional charges , just like if you needed a csection or induction that is a seperate cost from normal global billing.... So a provider who does additional care or services can end up being paid more than original contract amounts.