In late 2007, Centinela Hospital in Inglewood was losing nearly $1 million a month and had piled up $15 million in debt. Among the causes of the crisis: $25 million in overdue bills.
Collecting that money would have given Centinela a measure of relief. But the bills went unpaid, and the century-old medical center was sold. The new owners slashed services, closed half the operating rooms and laid off a third of the employees.
Who owed Centinela that elusive $25 million? According to hospital officials, it was health insurance companies.
“Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival,” said Von Crockett, Centinela’s chief executive. “Every single doctor and hospital is writing off money they are legally owed but don’t collect. It’s an insane situation.”
When I used to work at Merrill Lynch they used to say “paying late is the next best thing to not paying at all” (because you get the float.) Merrill was absolutely notorious for not paying its bills until about 2 seconds before it got sued.
When I had my first child, I added him to my insurance policy the day he was born (not possible to do it before.) Nonetheless I was stunned to start receiving bills for thousands of dollars for his care in the hospital. Why? Because, according to the insurance company, “it takes about 8 weeks to add a new member. In the meantime, we bounce all the bills. But when the member IS added, we WILL pay all the bills retroactively if they are re-submitted. Of course, it takes much longer to process a bill that has been re-submitted than it does to process a bill when it is first submitted, so we’ll probably end up paying these bills in about six months.”
Got that? When a kid is born, the insurance company doesn’t pay the kid’s bills for six months. That’s a LOT of float these folks are hanging on to!
Now, to top it off, I get a bill for $800 for MY anesthesia (I had a c-section.) Why? Because the anesthesiologist is not “in network.” If you don’t request an in-network anesthesiologist the insurance company won’t pay.
Now, I say — this is not possible. I’m being treated by an in-network obstetrician, I go to an in-network hospital. And I’m responsible for making sure (as I lying moaning on the table) that an in-network anesthesiologist treats me? Oh, says the insurance company. You’re right. [LIKE I’M THE FIRST AETNA MEMBER WHO EVER HAD A BABY AT THAT HOSPITAL???!!!!] Go ahead and re-submit the bill and we’ll pay in a few months.” [Actually it subsequently turns out that ALL the anesthesiologists at this hospital belong to a single organization which IS in-network and it doesn’t matter whether their individual names appear as such.]
Ahhh….I say to them. I finally get it. Paying late is the next best thing to not paying at all. [Not that they won’t try to not pay at all if they can get away with it.]