Hey, um, medical billing/insurance claim site of Tumblr, can I get a sanity check or some help on this one?
My kid was in a bike accident in may that resulted in him being transported to a hospital to get checked out due to someone saying they saw him pass out after. No concussion, and thank the stars and little fishes for that. But now I have received this bill.
The denial reason doesn’t sit right with me.
Denied due to provider contracted/negotiated rate expired/not on file.
It sounds like they don’t have accurate information on their system and they’re trying to make me pay because of it. But I can’t afford this. I can’t pay this.
UnitedHealth Group is charging patients a markup for key life-saving drugs that could easily exceed their cost by a factor of ten or more, according to findings from the Federal Trade Commission.
The report, which levels the same allegations at CVS and Cigna, is the latest indictment of America’s broken healthcare system and comes on the heels of last month’s shocking murder of UnitedHealthcare CEO Brian Thompson.
The U.S. is notorious for incurring the highest costs per capita of any wealthy nation, yet failing to achieve an even remotely equivalent improvement in patient outcomes versus Europe’s social market-based economies.
Critics argue that is due largely to the highly opaque manner in which needless markups are hidden to conceal inefficiencies that serve various vested interests. These include, but are not limited to, the big three drug middlemen known as pharmacy benefit managers (PBMs).
According to the FTC report, UnitedHealth’s OptumRx, along with Cigna’s Express Scripts and CVS Caremark Rx, were able to collectively pocket $7.3 billion in added revenue above cost during the five year period of the study through 2022.
“The Big 3 PBMs marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent,” it concluded.
A thousand percent increase in the price of a drug that costs $10 wholesale would result in a retail price of $110.
This markup rate applied to 22% of the specialty therapies examined, including Imatinib, a generic used to treat leukemia, or non-oncological Tadalafil for pulmonary hypertension. Others such as Lamivudine needed by HIV-positive patients were nearly quadruple the price of their acquisition cost.
Independent Vermont Sen. Bernie Sanders has been conducting Congressional hearings in an attempt to shed light on the problems posed by these drug middlemen as well as drugmakers themselves.
TOMORROW (Sept 24), I'll be speaking IN PERSON at the BOSTON PUBLIC LIBRARY!
Terminal-stage capitalism owes its long senescence to its many defensive mechanisms, and it's only by defeating these that we can put it out of its misery. "The Shield of Boringness" is one of the necrocapitalist's most effective defenses, so it behooves us to attack it head-on.
The Shield of Boringness is Dana Claire's extremely useful term for anything so dull that you simply can't hold any conception of it in your mind for any length of time. In the finance sector, they call this "MEGO," which stands for "My Eyes Glaze Over," a term of art for financial arrangements made so performatively complex that only the most exquisitely melted brain-geniuses can hope to unravel their spaghetti logic. The rest of us are meant to simply heft those thick, dense prospectuses in two hands, shrug, and assume, "a pile of shit this big must have a pony under it."
MEGO and its Shield of Boringness are key to all of terminal-stage capitalism's stupidest scams. Cloaking obvious swindles in a lot of complex language and Byzantine payment schemes can make them seem respectable just long enough for the scammers to relieve you of all your inconvenient cash and assets, though, eventually, you're bound to notice that something is missing.
If you spent the years leading up to the Great Financial Crisis baffled by "CDOs," "synthetic CDOs," "ARMs" and other swindler nonsense, you experienced the Shield of Boringness. If you bet your house and/or your retirement savings on these things, you experienced MEGO. If, after the bubble popped, you finally came to understand that these "exotic financial instruments" were just scams, you experienced Stein's Law ("anything that can't go forever eventually stops"). If today you no longer remember what a CDO is, you are once again experiencing the Shield of Boringness.
As bad as 2008 was, it wasn't even close to the end of terminal stage capitalism. The market has soldiered on, with complex swindles like carbon offset trading, metaverse, cryptocurrency, financialized solar installation, and (of course) AI. In addition to these new swindles, we're still playing the hits, finding new ways to make the worst scams of the 2000s even worse.
That brings me to the American health industry, and the absurdly complex, ridiculously corrupt Pharmacy Benefit Managers (PBMs), a pathology that has only metastasized since 2008.
On at least 20 separate occasions, I have taken it upon myself to figure out how the PBM swindle works, and nevertheless, every time they come up, I have to go back and figure it out again, because PBMs have the most powerful Shield of Boringness out of the whole Monster Manual of terminal-stage capitalism's trash mobs.
PBMs are back in the news because the FTC is now suing the largest of these for their role in ripping off diabetics with sky-high insulin prices. This has kicked off a fresh round of "what the fuck is a PBM, anyway?" explainers of extremely variable quality. Unsurprisingly, the best of these comes from Matt Stoller:
Stoller starts by pointing out that Americans have a proud tradition of getting phucked by pharma companies. As far back as the 1950s, Tennessee Senator Estes Kefauver was holding hearings on the scams that pharma companies were using to ensure that Americans paid more for their pills than virtually anyone else in the world.
But since the 2010s, Americans have found themselves paying eye-popping, sky-high, ridiculous drug prices. Eli Lilly's Humolog insulin sold for $21 in 1999; by 2017, the price was $274 – a 1,200% increase! This isn't your grampa's price gouging!
Where do these absurd prices come from? The story starts in the 2000s, when the GW Bush administration encouraged health insurers to create "high deductible" plans, where patients were expected to pay out of pocket for receiving care, until they hit a multi-thousand-dollar threshold, and then their insurance would kick in. Along with "co-pays" and other junk fees, these deductibles were called "cost sharing," and they were sold as a way to prevent the "abuse" of the health care system.
The economists who crafted terminal-stage capitalism's intellectual rationalizations claimed the reason Americans paid so much more for health care than their socialized-medicine using cousins in the rest of the world had nothing to do with the fact that America treats health as a source of profits, while the rest of the world treats health as a human right.
No, the actual root of America's health industry's problems was the moral defects of Americans. Because insured Americans could just go see the doctor whenever they felt like it, they had no incentive to minimize their use of the system. Any time one of these unhinged hypochondriacs got a little sniffle, they could treat themselves to a doctor's visit, enjoying those waiting-room magazines and the pleasure of arranging a sick day with HR, without bearing any of the true costs:
"Cost sharing" was supposed to create "skin in the game" for every insured American, creating a little pain-point that stung you every time you thought about treating yourself to a luxurious doctor's visit. Now, these payments bit hardest on the poorest workers, because if you're making minimum wage, at $10 co-pay hurts a lot more than it does if you're making six figures. What's more, VPs and the C-suite were offered "gold-plated" plans with low/no deductibles or co-pays, because executives understand the value of a dollar in the way that mere working slobs can't ever hope to comprehend. They can be trusted to only use the doctor when it's truly warranted.
So now you have these high-deductible plans creeping into every workplace. Then along comes Obama and the Affordable Care Act, a compromise that maintains health care as a for-profit enterprise (still not a human right!) but seeks to create universal coverage by requiring every American to buy a plan, requiring insurers to offer plans to every American, and uses public money to subsidize the for-profit health industry to glue it together.
Predictably, the cheapest insurance offered on the Obamacare exchanges – and ultimately, by employers – had sky-high deductibles and co-pays. That way, insurers could pocket a fat public subsidy, offer an "insurance" plan that was cheap enough for even the most marginally employed people to afford, but still offer no coverage until their customers had spent thousands of dollars out-of-pocket in a given year.
That's the background: GWB created high-deductible plans, Obama supercharged them. Keep that in your mind as we go through the MEGO procedures of the PBM sector.
Your insurer has a list of drugs they'll cover, called the "formulary." The formulary also specifies how much the insurance company is willing to pay your pharmacist for these drugs. Creating the formulary and paying pharmacies for dispensing drugs is a lot of tedious work, and insurance outsources this to third parties, called – wait for it – Pharmacy Benefits Managers.
The prices in the formulary the PBM prepares for your insurance company are called the "list prices." These are meant to represent the "sticker price" of the drug, what a pharmacist would charge you if you wandered in off the street with no insurance, but somehow in possession of a valid prescription.
But, as Stoller writes, these "list prices" aren't actually ever charged to anyone. The list price is like the "full price" on the pricetags at a discount furniture place where everything is always "on sale" at 50% off – and whose semi-disposable sofas and balsa-wood dining room chairs are never actually sold at full price.
One theoretical advantage of a PBM is that it can get lower prices because it bargains for all the people in a given insurer's plan. If you're the pharma giant Sanofi and you want your Lantus insulin to be available to any of the people who must use OptumRX's formulary, you have to convince OptumRX to include you in that formulary.
OptumRX – like all PBMs – demands "rebates" from pharma companies if they want to be included in the formulary. On its face, this is similar to the practices of, say, NICE – the UK agency that bargains for medicine on behalf of the NHS, which also bargains with pharma companies for access to everyone in the UK and gets very good deals as a result.
But OptumRX doesn't bargain for a lower list price. They bargain for a bigger rebate. That means that the "price" is still very high, but OptumRX ends up paying a tiny fraction of it, thanks to that rebate. In the OptumRX formulary, Lantus insulin lists for $403. But Sanofi, who make Lantus, rebate $339 of that to OptumRX, leaving just $64 for Lantus.
Here's where the scam hits. Your insurer charges you a deductible based on the list price – $404 – not on the $64 that OptumRX actually pays for your insulin. If you're in a high-deductible plan and you haven't met your cap yet, you're going to pay $404 for your insulin, even though the actual price for it is $64.
Now, you'd think that your insurer would put a stop to this. They chose the PBM, the PBM is ripping off their customers, so it's their job to smack the PBM around and make it cut this shit out. So why would the insurers tolerate this nonsense?
Here's why: the PBMs are divisions of the big health insurance companies. Unitedhealth owns OptumRx; Aetna owns Caremark, and Cigna owns Expressscripts. So it's not the PBM that's ripping you off, it's your own insurance company. They're not just making you pay for drugs that you're supposedly covered for – they're pocketing the deductible you pay for those drugs.
Now, there's one more entity with power over the PBM that you'd hope would step in on your behalf: your boss. After all, your employer is the entity that actually chooses the insurer and negotiates with them on your behalf. Your boss is in the driver's seat; you're just along for the ride.
It would be pretty funny if the answer to this was that the health insurance company bought your employer, too, and so your boss, the PBM and the insurer were all the same guy, busily swapping hats, paying for a call center full of tormented drones who each have three phones on their desks: one labeled "insurer"; the second, "PBM" and the final one "HR."
But no, the insurers haven't bought out the company you work for (yet). Rather, they've bought off your boss – they're sharing kickbacks with your employer for all the deductibles and co-pays you're being suckered into paying. There's so much money (your money) sloshing around in the PBM scamoverse that anytime someone might get in the way of you being ripped off, they just get cut in for a share of the loot.
That is how the PBM scam works: they're fronts for health insurers who exploit the existence of high-deductible plans in order to get huge kickbacks from pharma makers, and massive fees from you. They split the loot with your boss, whose payout goes up when you get screwed harder.
But wait, there's more! After all, Big Pharma isn't some kind of easily pushed-around weakling. They're big. Why don't they push back against these massive rebates? Because they can afford to pay bribes and smaller companies making cheaper drugs can't. Whether it's a little biotech upstart with a cheaper molecule, or a generics maker who's producing drugs at a fraction of the list price, they just don't have the giant cash reserves it takes to buy their way into the PBMs' formularies. Doubtless, the Big Pharma companies would prefer to pay smaller kickbacks, but from Big Pharma's perspective, the optimum amount of bribes extracted by a PBM isn't zero – far from it. For Big Pharma, the optimal number is one cent higher than "the maximum amount of bribes that a smaller company can afford."
The purpose of a system is what it does. The PBM system makes sure that Americans only have access to the most expensive drugs, and that they pay the highest possible prices for them, and this enriches both insurance companies and employers, while protecting the Big Pharma cartel from upstarts.
Which is why the FTC is suing the PBMs for price-fixing. As Stoller points out, they're using their powers under Section 5 of the FTC Act here, which allows them to shut down "unfair methods of competition":
The case will be adjudicated by an administrative law judge, in a process that's much faster than a federal court case. Once the FTC proves that the PBM scam is illegal when applied to insulin, they'll have a much easier time attacking the scam when it comes to every other drug (the insulin scam has just about run its course, with federally mandated $35 insulin coming online, just as a generation of post-insulin diabetes treatments hit the market).
Obviously the PBMs aren't taking this lying down. Cigna/Expressscripts has actually sued the FTC for libel over the market study it conducted, in which the agency described in pitiless, factual detail how Cigna was ripping us all off. The case is being fought by a low-level Reagan-era monster named Rick Rule, whom Stoller characterizes as a guy who "hangs around in bars and picks up lonely multi-national corporations" (!!).
The libel claim is a nonstarter, but it's still wild. It's like one of those movies where they want to show you how bad the cockroaches are, so there's a bit where the exterminator shows up and the roaches form a chorus line and do a kind of Busby Berkeley number:
So here we are: the FTC has set out to euthanize some rentiers, ridding the world of a layer of useless economic middlemen whose sole reason for existing is to make pharmaceuticals as expensive as possible, by colluding with the pharma cartel, the insurance cartel and your boss. This conspiracy exists in plain sight, hidden by the Shield of Boringness. If I've done my job, you now understand how this MEGO scam works – and if you forget all that ten minutes later (as is likely, given the nature of MEGO), that's OK: just remember that this thing is a giant fucking scam, and if you ever need to refresh yourself on the details, you can always re-read this post.
The paperback edition of The Lost Cause, my nationally bestselling, hopeful solarpunk novel is out this month!
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
"Cigna tracks every minute that its staff doctors spend deciding whether to pay for health care. Dr. Debby Day said her bosses cared more about being fast than being right: “Deny, deny, deny. That’s how you hit your numbers,” Day said.
...
As ProPublica and The Capitol Forum reported last year, Cigna built a computer program that allowed its medical directors to deny certain claims in bulk. The insurer’s doctors spent an average of just 1.2 seconds on each of those cases.
...
Some of the more astonishing problems that Day spotted have stayed with her. In a case involving a newborn who needed an epilepsy evaluation, Day noticed that a Cigna nurse had listed the mother’s name as the patient, rather than the baby’s. Day fixed that mistake, avoiding what certainly would have been a denial. In another case, a nurse recommended denying payment for an ultrasound of the neck because the treatment wasn’t medically necessary. But the nurse had gotten the body part wrong. It was a hip that was injured, and the imaging was needed. An appeal that landed on Day’s desk involved Cigna’s decision to reject payment for a test because it wasn’t medically necessary for a patient with a sexually transmitted disease. But Day figured out that the patient had toenail fungus, not an STD.
Day said her bosses didn’t want to hear that she was catching errors. By October 2020, Cigna had placed Day on a performance improvement plan that required her to raise her “productivity level” — referring to the score on the dashboard — to at least 70%, which would be a significant jump for her but was slightly below the median for medical directors. The company made the consequences crystal clear: If she failed to successfully complete the plan, she could be terminated."
For the love of everything that's fucking holy if you have a surgical procedure in January get them your 2026 insurance info!!!!
I'm getting tired of chasing people to prevent them from getting denials from THEIR insurance company!! Drives me crazy I have to call, text, myChart message ppl and still get no response. How do you emphasize how important this shit is to people who don't care!?!?!
If you have ever wondered why health insurance in the US is so messed up, I highly recommend checking out Dr. Glaucomflecken’s 30 days of Healthcare series. Click here for the YouTube playlist or click here for the TikTok playlist.
Each video is about 1-3 minutes and goes through different aspects of the healthcare industry explaining how it works and especially how corrupt it is.
I spent 5 years working hospital finance watching the way health insurance directly affected my patients, and oftentimes seeing the ways lack of access to affordable healthcare resulted in chronic and emergent conditions, and even death. I cannot stress enough that I literally saw people die because their insurance denied them treatment. And on the billing side, the things people would complain about to me as something the doctors or hospital were doing wrong were usually a direct result of the way health insurance runs everything. It’s disgusting.
At the end of the series, he has a call to action - ways we (as regular people) can help work to improve healthcare (other than pushing for universal healthcare/Medicare for all). A lot of people talk about how ridiculous US Healthcare is but rarely do I see anyone talking about what we can do to change it. I think this is the most important video of all, so I’m including it here.
This video series is probably the most comprehensive, easiest to understand breakdown of the way healthcare fucks everyone over - patients, doctors, and hospitals alike. Please check it out!
“We weren’t given proper instruction to actually pay the claim, and there wasn’t enough monies in certain files in certain companies to pay medical claims,” Collins said. “We would have to just get the client off the phone as fast as we could.”
Health insurance ‘delay tactic’ is too common: Former Cigna executive
Collins described crying at her desk while handling calls from desperate patients, as supervisors laughed.
Collins, now the owner of “Mother’s Keeper Doula,” quit her position after attempting to approve payment for a widowed mother of five whose husband died of pancreatic cancer, saying supervisors had instructed her to deny the hospice claim and get the caller “off our phone line.”
Cigna has got to be the worst insurance company. A little heads up if you have it. Cigna will tell you that you're covered at 100% for chiropractor care in or out of network. But what they don't tell you is they don't price out of network claims, they send them to a "repricing" 3rd party and if the repricer decides for instance that your $300 bill is actually only supposed to be $200 that that is paid at "100%" and unfortunately for you since they have no actual right to do that(because out of network soctors havent agreed to any price reductions) you can get left with the remainder of the bill if your doctor says no I'm not negotiating. And no one will talk to your doctors office about getting it fixed and they'll pass the blame off on one another back and forth and tell the doctors office to just bill you.
Because Cigna is hoping your doctor WILL bill you the rest and you won't call them because you won't realize you have any other options. But you do.
Cignas out of network page says "please call the number in your cigna card in the event that your eob indicates that cigna used a third party vendor program to price your claim and you have been billed more than what is indicated on your EOB as the amount you owe"
And this is a small example. I've seen repricing on forums that was $400 for a $30,000 bill. Don't let your insurance screw you out of your benefits!
