If you could act as the ultimate authority in this situation, what would you do?

WHEN MOST PEOPLE are told they owe a coinsurance payment on a medical bill, they simply grimace and write a check-but not Gerald Haeckel, a retiree from Richmond, Virginia. He wanted proof that he was not paying more than the 20 percent portion that his health insurance policy required. When his insurer, Trigon Blue Cross/Blue Shield, balked, the retiree besieged state and federal officials with demands for an investigation. Gerald's problem with insurer-provider negotiated discounts began when he became confused by a bill sent by Trigon Blue Cross/Blue Shield. The bill was for Gerald's wife's lumpectomy, which is an out- patient surgery to remove a tiny breast tumor. Trigon's patient benefits statement indicated that the surgery had cost $950, that Trigon paid 80 percent or $760, and that Gerald owed a 20 percent copayment of $190. But then Gerald received a statement of charges and allowances from the surgery center indicating that Trigon's share of the bill had been more than halved to $374 because of a "contractual adjustment." Gerald assumed that a mistake was made in the surgery center's state- ment, because if it were correct, his $190 copayment would exceed a third of the actual cost, instead of the 20 percent called for in his healthcare policy's patient responsibility section. Gerald's scrutiny of the $950 surgery bill led to a surprising discov- ery. Although insurance companies frequently complain about being duped by fraudulent policyholders and providers, Trigon and dozens of other health insurers and managed care companies stand accused of a scheme to siphon off millions of dollars from their policyholders. How does the alleged scheme work? For surgery priced at $1,000, the typical plan might call for the insurer to pay 80 percent, or $800, which leaves the patient with a $200 copayment. But if the insurer has negotiated a 50 percent discount from the provider and does not pass any of the savings on to its policyholders, the patient's $200 copayment becomes 40 percent of the $500 actual bill, and the insurer's portion drops to only $300. Trigon's responses to Gerald's queries stirred up more questions than answers. Norwood H. Davis, Trigon's CEO at the time, assured Gerald that he did indeed owe the $190 and added that the details of Trigon's provider contracts were proprietary." In another letter, Norwood made a distinction between Trigon actually paying its $760 share of the bill and discharging" it. Norwood added that although Trigon might try to persuade a provider to accept less than its $760 portion of the bill , a policyholder was free to do the same thing regard- ing the copayment. Gerald, who by that point was livid, replied, "Sug- gesting that an individual policyholder negotiate with a provider for price concessions borders on the insulting." and threatened to take the matter up with state regulators. At a time when consumers are expected to take more responsibil- ity for their own healthcare, undisclosed discounts raise questions about the accuracy and honesty of information provided by insurers, providers, and employers. Indeed, providers often are contractually prohibited from disclosing discounts. The insurance industry argues that hiding discounts is not widespread, and Chicago-based Blue Cross and Blue Shield Association notes that no court has ruled for plaintiffs in a discounts-related case. It adds that none of its affiliates that settled such cases admitted to wrongdoing. Furthermore, Blue Cross and Blue Shield Association executives argue that the discounts benefit policy- * holders by reducing premiums and that some employers who share in the savings ask that discounts not be disclosed to their own employees. "We're not lining our pockets with anything because there is nothing to line our pockets with," said Joel Gimpel, a Blue Cross and Blue Shield Association attorney