KNX 1070 Investigation: More Calif. Doctors Illegally Charging Insured Patients Extra Fees

LOS ANGELES (CBSLA.com) — A growing number of California doctors are charging their insured patients extra fees to cover everyday office expenses — a practice that's illegal under most health care policies, according to KNX1070's investigative reporter Charles Feldman.

Some doctors say they need to charge the extra fees because of the rising costs of running a practice. Some even cite the Affordable Care Act, also known as Obamacare, as adding to their costs.

Anthony Wright, of the consumer watchdog group Health Access California, says that reason doesn't fly.

"The Affordable Care Act has another provision that puts a limit on how much your premium can be spent on patient care, rather than administration and profit. So, again, having an outside fee that is for administration is in violation in the spirit of the law, which is to try to limit the amount of money that's spent on administration profit, and really target those dollars towards patient care," Wright said.

For the vast majority of Californians who have health insurance — which is now more than 20 million residents —  adding on extra fees beyond the usual co-payments and co-insurance is illegal under state law.

"Health plan members cannot be charged administrative fees when they visit an in-network provider," says Shelley Rouillard, the director of the California Department of Managed Health Care, which regulates the vast majority of health plans offered in the state.

The California Academy of Family Physicians says it hasn't heard of this practice here and has no policy in place.

Many doctors have long charged extra for such services as filling out school forms. But Feldman reports that new fees are cropping up recently, applied in the form of a flat fee, which range from a few hundred to more than $1,000 a year, regardless if a patient uses a particular office service.

Doctors in other parts of the country are starting to also add on these extra fees, says David Doyle, CEO of a major physician billing consulting firm in Michigan.

"There's definitely a growing number of physicians across the country that are moving in that direction," Doyle said. "And it should be noted that, up until several years ago, physicians did charge for certain services that were not covered, if you will, by insurance carriers such as preparing for school athletic forms, school participation forms, disability forms, things of that nature. Those were items that they had historically charged for — they're now expanding that into a much wider area."

For some plans it's not illegal to charge extra fees, because they're not covered by the state law that prohibits it. But it's almost impossible for a patient to find out whether their insurance company permits the fees; the contracts are between the insurer and the doctor, leaving the patient only to rely on the doctor's word that the fees are allowed.

If you think your doctor is charging you an illegal fee you can file a complaint by calling the California Department of Managed Healthcare's (DMHC) at (888) 466-2219 or submit the complaint online. To read more about the DMHC's laws and regulations click here.

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