The Doctor & The Insurer – A Fraudulent Love Story

I created this account for this post and I am sharing this story partly as a PSA, partly to rant, and partly in the hope that someone else has an idea of what I can do about this. 

My wife saw a Blue Cross in-network physician due to frequent sinus infections and cysts. After a CT scan showing structural obstruction, she had surgery to fix it. After the surgery, the doctor stated that after insurance we owed a balance of $6000 (I’ve rounded figures throughout this post for simplicity’s sake), and it was paid. 

A coupe of months later, we received an Explanation of Benefits from Blue Cross. The EOB stated that the pre-negotiated rate for this surgery was $2000. $1500 paid by the insurer, and $500 paid by the patient. The remaining $4000 was a right off as a in-network provider adjustment. As a result, we were due a $5500 refund from the doctor. 

The doctor refused to provide a refund and so we complained to BC. BC sent a demand letter to the doctor stating that they are “balance billing” and a refund is due. The doctor ignored the letter. BC decided to take no further action against the doctor, until we filed a complaint with BC.

After we complained, BC opened an investigation. The doctor finally responded to BC and said the procedure is cosmetic so no refund will be provided. This was a ridiculous claim. BC reviewed the surgery report, medical records, and billing records, and said it is not a cosmetic procedure. They then had the documents reviewed by an outside doctor, who concluded the procedure was medically necessary, was billed correctly the first time, and there is nothing to suggest that the procedure had any cosmetic component. Following this, BC sent another EOB (almost identical to the first) and a demand letter to the doctor to refund the money, as the doctor was balance billing. The doctor again refused. 

BC then had the option of refunding the $5500 from the doctor’s other patient payments. We are a third-party beneficiary to their provider contract with the doctor, and can claim damages for the provider’s breach of contract. At first it appeared that is what they would do. After several follow ups asking them to enforce their provider agreement and reimburse us, BC decided to issue a new EOB that I can only described as the Magic EOB.

The Magic EOB states not only the entire procedure is cosmetic, but also the doctor has no liability to us and BC has no liability to us. Case closed. In addition to the Magic EOB, BC deleted from the patient portal the first and second EOBs, and the independent medical evaluation that agreed with BC’s own prior evaluation. What documents did BC rely on in doing this 180 degree turn? None. Stunningly transparent.

When faced with doing right by a member, honoring their membership agreement, and enforcing the provider agreement, BC decided to do what’s easiest for them and in turn help the doctor commit fraud.

-I filed a complaint with the state insurance department. They closed it stating that this particular insurance plan is federally regulated and so could not help. 

-The state medical board is looking into it after we filed a complaint, but has already said that this is a potential “low-level” violation which typically results in a compliance letter. I would also expect the dr to use the new Magic EOB to get medical board to close the complaint. 

-I cannot sue Blue Cross over this because the plan is funded by the federal govt, which is immune from suit. 

-I could sue the doctor, but there’s no provision for attorney’s fees. Finding an attorney to take a case where the amount is $5500 is unlikely. 

This is our story. A crooked company looking out for a crooked doctor.