Dialysis patients caught in insurance fight

Saturday, February 23, 2008

Dialysis patients caught in insurance fight

By Patrick Howington
phowington@courier-journal.com
The Courier-Journal

Noble Orr has kidney failure that could kill him if he doesn't visit a dialysis center three times a week to filter his blood. He gets his treatments in Murray, a few miles from his Western Kentucky home.

But last year, Orr said, his health insurer, UnitedHealthcare, advised him to start traveling to Louisville for dialysis instead -- a trip of about 230 miles each way.

The Murray dialysis center wasn't in United's network of providers, but a Louisville center was. Orr's choice was to pay perhaps hundreds of dollars more per treatment to keep using the Murray center, or make the exhausting drive to Louisville.

"I knew I couldn't do it," said Orr, a retired General Motors plant guard who later switched insurance companies. "I'm 84 now, and my wife's 80. We couldn't make that trip three times a week."

Orr is one of several hundred kidney-failure patients in Kentucky and Indiana who have been trapped in a battle between insurers and kidney dialysis providers over reimbursement rates -- a battle that legislators have been asked to referee.

Dialysis companies want to keep insurers from slashing rates to providers that won't join their networks. Insurers say they need to do that to stop overpaying those centers and make them negotiate prices.

The bills dialysis providers are pushing in both states would limit how far insurers could ask patients to travel. They would also keep insurance payments to dialysis centers outside the insurers' networks from falling drastically.

The dispute pits two sets of companies with billions of dollars in revenue against each other -- and affects patients who are among the most medically fragile. Their options are to maintain dialysis the rest of their life, get a kidney transplant, or die.

"These people are some of the most vulnerable patients, and they shouldn't have to go through this from their insurance plan," social worker Linda Hill told a Kentucky Senate committee this week. She works for DaVita, the nation's second-largest dialysis firm.

Repeated efforts to get comment from UnitedHealthcare about Orr's case went unanswered.
The insurers' viewpoint

But health insurers say it's the dialysis industry that is trying to protect the bottom line. They say providers that have enjoyed unusually high reimbursements are asking legislators to keep it that way.

If that happens, providers of other health services will demand similar protection, said Melodie Shrader, executive director of the Kentucky Association of Health Plans.

"In the end, it's going to raise the cost of care for everyone," she told the Senate Banking and Insurance Committee.

Legislative planners estimate the proposed bills would increase overall health insurance premiums in Kentucky by $2 million to $5 million, or as little as one-tenth of 1 percent.

Committees in both chambers have heard testimony on the measures, House Bill 433 and Senate Bill 59, but haven't yet voted on them. In Indiana, a House committee last month recommended passage of a similar bill by an 8-3 vote.

The dispute involves a fraction of the roughly 10,000 dialysis patients in Kentucky and Indiana. Nearly 90 percent of those patients are primarily covered by Medicare, the federal health insurance program.

The others rely mainly on private health insurance. Of those, fewer than 500 choose a dialysis center that isn't in their insurance network, said Matt Bassett, a DaVita vice president. Insurers said the number is somewhat larger.

Bassett said those patients pay extra for a preferred provider insurance plan that allows them to choose out-of-network care.

But "that choice is effectively being taken away by insurance companies," he told Kentucky legislators.

The dispute was sparked last year when Anthem, Kentucky's largest health insurer, slashed its rate to dialysis centers that aren't in its network.

That raised the possibility that patients could be billed by dialysis providers for a large portion of their care -- perhaps forcing them to switch to an in-network center farther from their home.

Indeed, some UnitedHealthcare patients were asked last year to go 65 miles or more to in-network centers in Louisville to get their four-hour treatments.

UnitedHealthcare confirmed it sent letters to 55 members in March telling them they should switch centers. But that became unnecessary for most after the insurer signed a contract last fall with DaVita, adding numerous Kentucky centers to its network, said United spokeswoman Debora Spano.

Kentucky dialysis patients who packed into legislative hearings this week focused their outrage on the idea of switching centers at an insurer's bidding.

"We want the freedom to make the choices that we, as all Americans, have the ability to do," said John Robinson of Shively, 52, who was born with one kidney and has been on dialysis for 20 years.

"If I pay my (monthly premium), I should be able to go to the provider that I want to go to, and the one that's closest to me," said Chairitty Martin, 31, of Breckinridge County.
Care is costly

It might seem strange that such a large fight could occur over so few patients.

Though their number is small, dialysis patients' care is expensive. DaVita says the company's cost per treatment averages $266, and a dialysis patient gets 156 treatments a year.

But 87 percent of dialysis patients use Medicare, which pays only about $240 per treatment. To make up the difference, the providers charge insurance companies for the other 13 percent of patients much higher rates.

The dialysis centers will give the insurance companies a discount if they can count on a stream of patients through the insurers' network. But since dialysis centers have been able to charge insurers as much as $900 by not joining the network, some resist signing on to an insurer's network.

Anthem said it has never asked patients to travel long distances to reach an in-network center. And representatives of DaVita and Fresenius Medical Care, the nation's largest dialysis provider, said they have not refused to treat any patients because of their insurer.

But the companies said if their out-of-network pay stays dramatically lower than before, they may have to close some centers.

Legislators' reaction to the dispute ranged from sympathetic to skeptical.

When Carol Stallings of Mount Washington told the House committee she received a bill for $143,000 because UnitedHealthcare would not pay for her first three months of treatments at an out-of-network Fresenius center, one legislator expressed anger -- but against the dialysis company, not the insurer.

Rep. Jeff Greer, a Brandenburg Democrat who owns an insurance agency, noted that Fresenius' bill amounted to more than $3,600 per treatment. That's more than 10 times the amount the industry cited as an average dialysis bill. Given that, Greer told industry representatives, "I have a real problem with you sitting there bashing insurance companies as if they're out to get you."

Other legislators said they were reluctant to dictate reimbursement rates for dialysis.

"It seems like you're … asking us to negotiate your contract for you," said Sen. Tim Shaughnessy, D-Louisville.

The House and Senate committees asked insurers and dialysis companies to meet further and report back to them.

Reporter Patrick Howington can be reached at (502) 582-4229.

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