About Amy Umble:
Amy Umble is health reporter for The Free Lance-Star

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In Nextcare’s world, it’s the insurance plans and not the patients who pay

Dr. John Shufeldt, second from right, former CEO, was responsible for the testing program that got NextCare in trouble. He was in the area in 2010 to open a new NextCare office in Prince William County.

Of all the things I heard while working on Sunday’s story about the federal lawsuit against NextCare, the one that surprised me the most was the reaction of John Julian, the company’s chief executive.

The federal lawsuit sought refunds from NextCare for money that Medicare had paid the company for unnecessary tests. Five states, including Virginia, joined the suit to recoup money that the states paid under the Medicaid program. In July, the company paid $10 million to settle the suit.

So during a phone interview about the case, I asked Julian about his patients. Weren’t they due refunds too?

He replied, “Keep in mind the patients came into the clinic to be seen because they were ill. If we did an extra test, it doesn’t cost the patient any extra money. It would have been billed to a third-party payer.”

I did not challenge Julian at the time, but both he and I knew better. Patients paid for these unnecessary tests through higher insurance premiums, deductibles and copays, and through taxes to support Medicare and Medicaid.

A reader pointed this out in the comments section attached to the online version of the story. Jam2008 said,

“Julian is completely wrong. While the tests may have been billed to a third-party payer (insurance company), they are not necessarily paid by the insurance company. For example, until I reach my $2,500 deductible I pay 100% of the bill. After that, I pay 20% and insurance pays 80% until I reach my $4,000 max out of pocket. Only then will my insurance company (that third-party) pay 100% of the bill. This company cost the patients money, not just insurance companies. They absolutely should offer refunds.”

(The NextCare story appeared in our paper Oct. 28 and can be seen here.)