A Question-Answer email to& from PMC-Mr. Scarrow

Question Sent To Lloyd Scarrow CEO-PMC

Hello Lloyd:
Thank you for your reply to my email message yesterday. I learned at least one important new insight into your point of view, and this certainly helps me understand your argument better. Let me try to put this down in my own words, and ask you to point out to me if I am misunderstanding you. First I want to quote verbatim the third paragraph of the letter from Lisa Castellaw: "In recognition of the fact that we are currently out of network for your insurance, we will honor your in-network benefits. You will be responsible to pay your in network co-pay, deductible and/or coinsurance at the time of service. An adjustment to your account will be applied after the claim is processed to reflect the in-network benefits." Here is one specific point on which (I believe) we disagree: what is meant by "in-network benefits" as used in Lisa Castellaw's letter? 1) Stevens' definition: "In-network benefits" are those benefits that I would receive *if* PMC had been an in-network provider for UHC. 2) Skarrow's definition (please correct me if I am not capturing your intended meaning): "In-network benefits" are simply the difference between the "billed amount" and the "network discount", where these terms are defined per the UHC glossary of terms (see UHC website; I also copied UHC's definitions below). Comments: 1) There is roughly a factor of 10 difference in terms of how much I must pay, depending on which definition of "in-network benefits" is used. 2) In my opinion, the "Stevens definition" is consistent with the sense and meaning of the Castellaw letter. 3) In my opinion, the "Skarrow definition" is not even remotely suggested by any part of the Castellaw letter. 4) The lack of PMC's "in-network status" was the basis for the denial of my claim with UHC. This is stated plainly in UHC's written denial of my appeal. 5) PMC's out-of-network status was exactly the reason for Lisa Castellaw's written assurance that PMC would honor my in-network benefit. This is the obvious, straight-forward interpretation of Castellaw's letter. I assert that many PMC patients have, in fact, interpreted the meaning of Lisa Castellaw's letter in just this way. Summary: UHC has denied my claim (by way of a written response to my appeal) on the following basis (quoted verbatim from UHC's response to my appeal): "The terms of your plan require you to verify the "network status" of a health care provider before you access care." The letter from Lisa Castellaw clearly states that, because PMC was in "out of network" status, PMC would honor my in-network benefits. I made a decision before signing my agreement with PMC that the letter from Lisa Castellaw was an assurance that I would be responsible for the fees that I would have been charged if PMC had been an in-network provider. Lloyd, in my view we are making some progress in understanding each other, so I would like to thank you again for keeping this line of communication open. It is becoming clear to me that the Castellaw letter and the meaning of the terms used in that letter are central issues in our dispute, so focusing our attention on this letter (and away from the complicated history of interactions between LANS, PMC and UHC) may be very helpful to all of us. In fact, I think it would be quite helpful if you would comment on the purpose, meaning, and legal importance of Lisa Castellaw's letter, focusing on the patient's use of the letter, NOT on the background and history which were "invisible" to the patients at the time we were given the letter and required to make a decision based on our understanding of the letter. As always, if I have misrepresented your meaning or intentions in any of my communications to you, please point this out to me and I will correct my error. Definitions from UHC website: Definition of: Billed AmountThe total amount billed by the provider of the service. The amount the provider charges does not take into account any network discounts, if applicable. Definition of: Network DiscountAn agreement has been made with the provider to accept discounted payment for services. Billed Amount less this amount is the amount to be paid by plan and/or patient.

ANSWER FROM Mr. Scarrow-CEO PMC

Thanks Bob, Maybe this will help. Everyone with LANL signed two documents that related to reimbursement. The first reads as follows: "It is agreed that payment to the facility and(or)facility-based physicians pursuant to this authorization by an insurance company or health plan shall discharge said insurance company or health plan of any and all obligations under the policy to the extent of such payment. It is understood by the undersigned that he/she is financially responsible for charges not covered by this assignment." In plain terms, patients agreed to make themselves primarily responsible for that portion of the payment that insurance fails to make. Everyone, regardless of insurance, or in or out of network status, signs this or we do not provide treatment. The second document, which was provided to LANL insurds whom United representatives claimed would be reimbursed, was to assure you that we would treat you and your insurer as in network for co-payment responsibility. We traded a discount to your insurer in exchange for that arrangement. Legally, the default of your insurer on the discount arrangement allows us to hold you responsible for full charges and co-payment. While we are hurting as an organization, my board will not enforce to that, but we cannot give the care away. FYI- There are basically two things that facilities trade discounts for: Prompt payment and Volume. Our arrangement with LANL was based on both. Unfortunately, we only got a lot of volume. Bob, How does your paid insurer LANL/United justify it's position? Necessary procedures, provided by a competent facility, at the price they asked for. They even paid on some claims, but not the majority..... You seem very knowledgeable, help us all understand. -Lloyd Scarrow, CEO