UPDATE: Since the airing of this story, Fresenius, the company that provided dialysis to Sovereign Valentine, has agreed to waive his $524,600.17 bill
Over the past year, Americans reportedly borrowed an estimated $88 billion to pay medical bills. CBS News has partnered with Kaiser Health News and NPR on their "Bill of the Month" series, which uncovers shocking medical bills.
The latest installment looks at the cost of a life-saving dialysis treatment for 50-year-old Sovereign Valentine. Sovereign and his wife Jessica say their insurance company, Allegiance, said there were no in-network dialysis clinics in Montana. The company disputes this, based on their records.
"The doctor that I saw said, 'you will do dialysis, or you will die,'" Sovereign said.
Sovereign used an out-of-network facility, and received a bill for more than $540,000 for 14 weeks of care.
Allegiance said in a statement that "the main issue here seems to be a misunderstanding about the availability and location of in-network dialysis centers in Montana… Allegiance later also made special arrangements for an in-network option in Missoula."
Valentine's insurance company paid more than $16,000, but the couple still owes the unpaid balance of more than $520,000.
"To me, that's clearly just so wrong," Jessica said. "It seems unethical."
"It was shocking," Sovereign added. "It was overwhelming. It can be distressing to get bills, but it was so high that it was like, 'how could this possibly be?'
Dr. Elisabeth Rosenthal, editor-in-chief of Kaiser Health News, said the couple did everything right: they looked for an in-network provider, went to the directory, checked with a representative from the insurer, and even went to the insurance commissioner to seek help with the problem.
"Jessica is a trained physician and she worked the system as she was supposed to," Dr. Rosenthal said. "So this is kind of a case of the insurer and the provider not being able to agree on whose fault it is, and it's hostage taking, of course, of Valentine, who's left with this bill."
"She did a whole lot of stuff in the setting of a very serious life crisis for her husband," Dr. Rosenthal added.
Allegiance and the Valentines' provider, Fresenius Medical Care, are now working to settle the dispute. Fresenius said in a statement that they're working directly with Sovereign to resolve the issue. But Dr. Rosenthal said that doesn't mean the Valentines are off the hook.
When asked if she thought the couple would have to pay the remainder of the bill, Dr. Rosenthal said that "I really hope they won't." When a bill gets widespread press coverage she added, "the bill disappears" – but she noted that "that's not a solution for everyone."
Part of the problem, Dr. Rosenthal said, is that Sovereign was charged thousands of dollars per session. "Medicare pays for most kidney dialysis in this country, they pay about $235 a session," she said. "Sovereign was charged $14,000 a session. So the list price is 50 times higher than the price that Medicare would pay. Most private insurers will negotiate that down to about 4 to 5 times what Medicare would pay." She recommended that anyone seeking care without insurance should find out what Medicare would pay, and offer to pay 2 to 3 times more.
The list price was so high, she said, because "the sky's the limit."
"The price of a procedure is whatever the market will bear," she added. "And if you're stuck, it will bear a lot."
Read full statements from Allegiance and Fresenius Medical Care below:
"Apart from the excessively high out-of-network bills the family received, the main issue here seems to be a misunderstanding about the availability and location of in-network dialysis centers in Montana. Allegiance records show that a case manager told the family that while there wasn't an in-network dialysis center in Missoula, there was one in Polson, where the travel distance for the family would be about the same. Allegiance later also made special arrangements for an in-network option in Missoula. The family's experience demonstrates just how important it is to stay in-network, because when you do, you benefit from a much lower negotiated rate and surprise balance bills are prohibited."
Brad Puffer, spokesperson of Fresenius Medical Care North America:
"We sympathize with anyone who is trying to navigate challenging insurance circumstances while managing a difficult diagnosis. This person was unfortunately a victim of a healthcare system where insurers are increasingly shifting the financial burden to patients. We have a contracted rate with Cigna, Allegiance's parent company, which should be honored by Allegiance. Our patients should not face "balance bills" that are high because an insurance carrier fails to provide adequate in-network options. We are fortunate to have built excellent relationships with payors and have the largest contracted network in the country to ensure patients can access the care they need.
"We are working directly with this patient to immediately resolve the situation. We are committed to doing the right thing so that our patients are not placed in the middle of these disputes. In the future, we pledge to better identify situations where we believe the insurer has incorrectly classified one of our facilities as being out of network. This will allow us to address the matter directly with the insurer in the first instance, without them placing the patient in the middle.
We welcome ongoing efforts to improve transparency around billing and to help end these gaps in insurance coverage that unnecessarily burden our patients. We take great pride in the superior care we provide that helps our patients thrive while receiving life-sustaining dialysis treatment, which remains our top priority."