Cyrus Dugger

The Check is Not in the Mail: Watching Your Medical Costs Go Up

Anybody who missed it should read the May 25, 2006 N.Y. Times Article "The Check is Not in the Mail." The article describes the common practice of delay and foot-dragging by medical insurance providers in the payment of the bills doctors send them. The article quotes the Chief Executive of the California Medical Association as stating that this:

"Tardiness or refusal to pay what doctors consider legitimate medical claims may add as much as 15-20% in overhead costs for physicians, forcing them to pursue those claims or pass along the costs to other patients."

The next time you hear somebody talking at a dinner party about how medical malpractice lawsuits drive up the cost of medicine and insurance premiums, be sure to ask them how much they think delay of payment by medical insurers to doctors drives up costs.

The article discusses how medical insurers not only drag their feet on payment (making an additional profit off of the time they hold onto the money through their investments), but sometimes simply claim that they never received the bill. This practice occurs even when the doctor sent the bill by way of certified mail and has a signed signature slip.

When the medical insurance industry attempts to use the increasing costs of medicine as a justification for cutting back the ability to bring malpractice lawsuits they need to answer for how their own bill delaying practices drive up the very costs that they use to lash out at others.

I wish the explanation for the high cost of medicine were as simple as out of control malpractice lawyers - it would be easy to fix. Unfortunately, the problem is much more complex.

Let's keep asking medical insurance companies the hard questions about why the cost of medical insurance is increasing.

To connect to the doctor report evaluating and ranking insurance company payment speeds and practices discussed in the article click here.

To read DMI's Marketplace of Ideas presentation by Harvey Rosenfeld (founder of the Foundation for Taxpayer and Consumer Rights and author of Proposition 103) on how California reduced the cost of insurance , click here.

Cross-Posted from DMIBlog

If you or your organization is interested in learning more about or working on these types of civil justice issues, please feel free to contact me at

Cyrus Dugger
Senior Fellow in Civil Justice
Drum Major Institute for Public Policy

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Posted at 9:05 AM, Jul 06, 2006 in Civil Justice
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