Contract, contract, who has the contract

A patient goes to the doctor. The doctor has a list price, the doctor agrees to bill the patient’s insurance, the patient agrees to pay whatever portion insurance doesn’t pay, and the doctor (being in network) has a separate agreement with the insurance company to accept the negotiated price as payment in full.

In a normal scenario, the doctor’s list price (full billed amount listed on the chargemaster) is $300, but the negotiated price with the insurance company is $200. The insurance company pays somewhere between $0 and $200, the patient pays the rest to a total of $200, and that’s the end of it.

In a screwy scenario, the doctor’s list price is $300, but the negotiated price with the insurance company is $350. The insurance company pays somewhere between $0 and $350. What does the patient owe?

The doctor can seek payment from the insurance company, and presumably is entitled to collect up to $350 from the insurance company under the terms of the doctor’s contract with the insurance company. But what exactly entitles the doctor to seek more than $300 from the patient, if the insurance company has paid less than $300?

(In a sane world, the insurance company would never agree to pay more than the list price. We don’t live in that world.)

My feeling is that when I provide the doctor with my insurance information, I am allowing him to bill my insurance and keep whatever he collects from my insurance. But the fundamental debt is mine, and the insurance company is simply helping to cover that debt. If I can owe more than the list price simply because the insurance company has negotiated an even higher price, then my relationship with the insurance company is backwards and I’m helping to cover the insurance company’s debt.

I’ve seen this sort of too-cozy relationship with auto body shops and car insurance, where the body shop feels that the insurance company is the customer rather than the car’s owner being the customer.

Suppose that the fundamental debt is mine, and suppose that the doctor cannot seek more than $300 from me, but is allowed to keep $350 from the insurance company if the insurance company decides to pay the bill in full. What if I see the doctor twice with a list price of $300 each time, and the insurance company pays $350 for the first visit and only pays $100 for the second visit? Should the amounts be aggregated? If each visit is treated separately, then I owe $0 for the first visit and I owe $200 for the second visit. If the visits are aggregated, then I only owe $150.

You know what we need? Some sort of clear rules about how all this works. I’m surprised that I’m having so much trouble finding those rules. If we had insurance regulations, those would probably address this sort of question, wouldn’t they?