When Sovereign Valentine learned he was in kidney failure and needed immediate dialysis, he and his wife, a physician at their local hospital, searched for an in-network facility to no avail, Jenny Gold reports for NPR and Kaiser Health News. With no other options, Sovereign began dialysis at an out-of-network facility—and ended up with a $524,600.17 bill.
For months, Sovereign, a 50-year-old personal trainer, had felt his health declining. He tried to adjust his diet and workouts, but the changes did little to improve his condition. Then one Sunday, Sovereign was vomiting uncontrollably and sought medical attention at the hospital in his small hometown of Plains, Montana. That day his wife, Jessica Valentine, was the on-call physician at the hospital.
Sovereign was diagnosed with kidney failure and transferred to a hospital where was stabilized and given his first round of dialysis. But the doctors told him he'd need additional dialysis at an outpatient facility three times a week, Gold reports.
The only option for dialysis was out-of-network, he was told
A social worker at the hospital told Sovereign his only options were two out-of-network providers that were 70 miles away from his home. Sovereign decided he would use Fresenius Medical Care.
Shortly after Sovereign began his dialysis treatment at Fresenius, a case manager with his insurance company, Allegiance, called to warn him that Fresenius wasn't in Allegiance's network and he could be responsible for the amount his insurer didn't cover. According to handwritten notes Jessica took during the conversation, the case manager informed the couple there were no in-network dialysis providers in Montana.
Jessica said she had repeatedly asked both the insurer and the dialysis clinic about the expected out-of-pocket costs for Sovereign's treatment, but she never received an answer.
Soon, he owed upwards of $520K
Then, Sovereign received a $540,841.90 bill for 42 rounds of dialysis at Fresenius. Sovereign's insurance had paid $16,241.73 for his dialysis treatments, and the clinic billed Sovereign for the remaining balance of $524,600.17.
Fresenius had charged $13,867.74 per dialysis session, significantly higher than the $235 Medicare typically pays per session, Gold reports.
According to Gold, dialysis centers often say they must charge privately insured patients more to offset the low Medicare payments. Sabrina Corlette, a professor at Georgetown University's Health Policy Institute, said, "The dialysis companies may think they can get closer to what they want from the health plans by staying out of network and charging these prices that are totally untethered to their actual costs."
But as Gold reports, the $13,867.74 per dialysis session is high even accounting for the usual markup. A recent JAMA study found commercial payers usually pay about $940, or four times the Medicare rate. According to Gold, Fresenius was able to charge such a high figure because, together with DaVita, the companies have established a so-called "duopoly," dominating 70% of the U.S. dialysis market.
After a reporter raised questions over Sovereign's bill, a financial counselor told Jessica that Sovereign qualified for a 50% discount on his dialysis treatment based on their income, which would bring their bill to $262,400.08. Jessica said she's still unwilling to pay the cost and is considering contacting a lawyer for help or filing bankruptcy. "I want to pay what we owe and what's reasonable and what his care actually cost," Jessica said.
The in-network provider that'd been there all along
To avoid more out-of-network bills, Jessica worked with the insurance case manager to find an in-network dialysis provider, but they could not find one. Then, Jessica wrote to the Montana insurance commissioner, who helped her find an in-network dialysis clinic, which had not shown up on the insurer's directory, Gold reports. Jessica then arranged for her husband to begin his dialysis treatments there.
Jessica said, "It's very, very frustrating to be a patient, and it's very disempowering to feel like you can't make an informed choice because you can't get the information you need."
A spokesperson for Allegiance told Gold the Valentine should have found the in-network provider sooner. "There is always the potential for customers to misunderstand information about how their health plan works, especially in stressful situations," the spokesperson said.
Brad Puffer, a spokesperson for Fresenius Medical Care North America, said, "This is one example of the challenges that can arise from a complex health care system in which insurers are increasingly shifting the financial burden to patients. The insurance company should accurately advise patients of in- and out-of-network providers. It is the patient's choice when they receive that information as to which provider they select" (Gold, "Shots," NPR/Kaiser Health News, 7/22).