In recent years, the US Consulate General in Tijuana, Mexico, has reportedly received numerous complaints from US citizens about some of the healthcare facilities in Los Cabos, Mexico’s popular beach vacation region, located at the tip of Baja California. A statement from the US Consuls and Embassies in Mexico said: “Complaints documented by the Consulate include allegations that some Los Cabos-area hospitals have withheld care for payment, engaged in price gouging, failed to itemise charges, withheld US passports, obstructed needed medical evacuations, gave monetary incentives to ambulances for delivering patients to specific facilities, and held patients at hospitals against their will pending payment.”
A number of cases have been reported and recorded in Los Cabos, including one US citizen who was reportedly hospitalised with a fractured ankle and declined the recommended operation. The facility allegedly told the family of the injured person that the airline would not clear the citizen to fly without the operation, which was apparently untrue. Another citizen was hospitalised due to an apparent drug overdose. The medical evacuation company was not able to secure the patient’s release until the patient’s family payed US$36,000. There are plenty more stories like these. However, the issues are not confined to Los Cabos, with other regions of Mexico affected.
Indeed, TPA Network, which works with both small and large-scale health insurers, third-party administrators, health maintenance organisations and other health plan administration entities in the US and offshore, said that some of the treatment is ‘aggressive, unethical and potentially harmful … to patients who have become seriously ill or injured while in Mexico’. Its Medical Bill Review Services for Care Delivery in Mexico documents allegations that hospitals are committing a number of serious offences such as withholding care or holding patients at hospitals against their will, pending payment, withholding passports until payment is made, obstructing medical evacuations, and positioning employees as in-house resort doctors to direct care to their facilities.

There are some hospitals that are great in Mexico but like anywhere worldwide these days we find a lot of inflation of charges, or unbundling of codes

The list of accusations is serious, and includes many Jacquie Schwoerke, Director, Global Patient Services at Sharp HealthCare, has also come across. Her hospital in San Diego accepts patients who have been evacuated from Mexico, she explained. “The number of times I’ve had to contact the US Consulate representative down there [Mexico] and get them up in the night as the air ambulance is there, I was trying to get them out of the hospital, but the [hospital] won’t give them their passport,” she said. “It’s awful. The US Consulate will step in because, by law, they really cannot hold anybody in a hospital even if they can’t afford to pay the bill. That is a fact.”
Schwoerke says she’s come across many other situations where patients may be intimidated. “What happens is, the hospital administration then threatens their family that they will call the ‘Federales’, who will detain them until the bill is paid,” she explained. “That’s not true. Once you get the consulate, representing the foreign traveller, they will come in and protect them.”
The perpetrators in Mexico are limited but seem to be making life very difficult for international hospital patients. “It is a small group of private hospitals, but they are tainting the reputation of the quality providers and hospitals throughout the rest of Mexico,” added Schwoerke. She would not name the hospitals in question, but said they are recognisable.
To their credit, experts say Mexico’s authorities have acted quickly against hospitals whenever the US Consulate has taken up the problems for individuals. The problem is, it’s easy for hospitals and doctors to set up operations again, sometimes under different names.
Separately from the physical intimidation, Schwoerke believes there can be significant financial irregularities from these hospitals. Some are price gouging and profiteering by charging highly inflated tourist rates to foreigners, she said. For instance, she has noticed that sometimes the price for services will exactly match whatever the credit limit is on a tourist’s credit card.

Follow the money

But, more worryingly, Schwoerke says, some of the hospitals have drastically increased the charges for services rendered in Mexico. Also, it’s very difficult to know how things are being coded, and she suspects that sometimes services are being unbundled. This phenomenon has also been spotted by TPA Network.
Unbundling is when a hospital does not charge the price attached to an entire procedure – represented by a single code. Instead, the procedure is broken down into its component parts – such as including charges for individual surgical items – which each have individual codes and prices. But, when added up, these individual codes and prices may surpass the price of the code of the original procedure. Schwoerke also suggests some unscrupulous billing companies working with the hospitals are doing just this.

It is up to insurers to inform customers which hospitals to avoid when they visit Mexico

Gigi Galen Grobstein, President and Founder of Star Healthcare Network in the US, a cost containment firm that works closely with Sharp HealthCare, agrees that there is a problem with the kinds of billing they are seeing out of Mexico, but she said this is similar to her experiences all around the world. “There are some hospitals that are great in Mexico, but like anywhere worldwide these days we find a lot of inflation of charges, or unbundling of codes,” she said.
She recounted a particular case in Mexico, which was investigated together with Sharp HealthCare. She said: “Charges from the hospital were inappropriate, and we found a physician billing for services even though the doctor had no affiliation with the hospital. It was a fabricated claim.”
But, some of the US billing companies working for Mexican hospitals actually help companies like Grobstein’s. “There are a lot of American firms that are billing for Mexico, which I find helpful,” she said. “Sometimes in Mexico, with billing, you are not clearly understanding whether things are in US dollars or in pesos. Sometimes, the coding is unclear and not in the right format, which is how we clearly review a claim.”
Things can be very complicated when dealing with some of the hospitals there, she also said. “A lot of times, I prefer an American firm helping out a hospital in Mexico because it’s easier to differentiate the services,” she said. “When we get bills from Mexico providers, they sometimes don’t have very much information, the bills are unclear, such as what happened with the patient, so we spend a lot more time with the Mexican bills or any bills outside the US. And we have to check that the bill comes from the hospital.”
For its part, the US Department of State has issued advice for patients to ensure proper billing for hospital services: “Obtain the estimated cost of any proposed treatments; request an itemised bill every day; express any concerns about billing with hospital administration immediately; if uncomfortable with costs, check with other hospitals and if medically possible, change hospitals; immediately work with your insurance company – do not assume the hospital will; and if it appears that the dispute will be unresolvable, contact the Embassy/Consulate/Consular Agency for additional advice.”
Tellingly, it suggests: “Additionally, patients have the right to consent to treatment and where they will receive treatment. Finally, hospitals may not retain or attempt to detain a patient, his/her passport, or body to guarantee payment of medical services provided.”

What to do?

Experts say the industry must work together if it is to solve the problem, but only if there are more formal complaints made. Schwoerke suggests that it is up to insurers to inform customers which hospitals to avoid when they visit Mexico. After all, they always know where customers are travelling to and are able to list hospitals to avoid. “They should have a flyer or a letter saying welcome to your policy, please avoid these hospitals in the area you are going to. Please notify the embassies where you are travelling,” she advised. “These companies need to engage the consumers when there is a hostage situation. They need to advise the traveller never to give up their passport, because once you’ve given your passport you have no way out of the country,” she said. Certainly, the US Consulate in Mexico has issued a list of preferred hospitals and tells visitors to restrict visits to these only.
Richard Nicholas, Principal Consultant at TPA Network says he has dealt with health insurance in the US and Mexico for nearly 40 years and there has always been an issue with fraud both domestically and abroad. “There are certain elements of the problem that will likely persist,” he said. “Unfortunately, there will continue to be innocent people that will fall through the cracks as there will always be a small hospital facility in a tourist location that will seize the opportunity to take advantage of the situation. That’s one of the reasons we started our service.”

Rogue billing companies are known to contract with hospitals and overbill claims, thereby perpetuating the acrimony and further straining the relationship between providers and payers

But, new technologies should help somewhat, Nicholas says. “With the advent of social media and utilities such as YELP, those hospital facilities that continue to cause problems in the future will be called out,” he explained. “It is likely that the various hospital associations in Mexico will try to police their own a little better as tourism is a major revenue source in Mexico.”

An exercise in trust

Scott J. Rosen, President and CEO of MDabroad, says the picture is slightly more nuanced than it may at first seem. For example, healthcare is a lot more expensive in Mexico than many assume. The country has suffered from a volatile economic situation that has contributed to costs too. “There is an expectation by payers that healthcare should be inexpensive in Mexico. While the cost of labour and some locally manufactured products are less expensive than in Europe, and certainly in the US, there are several factors that contribute to a higher price tag on private care in Mexico,” he said.
And, says Rosen, international insurance companies can sometimes add to the problem. “Getting paid from international insurers is difficult, the revenue cycle is unpredictable and there is a higher default rate than the lower market,” he said. “This all contributes to a higher cost of care.”
Rosen believes there is plenty of mutual distrust. “It is true that insurers or assistance companies typically come from a place of cynicism when it comes to the integrity of the billing practices of medical organisations,” he said.
But unscrupulous companies make everything worse. “There are definitely some nefarious players in the market,” he explained. “Rogue billing companies are known to contract with hospitals and overbill claims, thereby perpetuating the acrimony and further straining the relationship between providers and payers. In response, payers audit every bill, negotiate hard and really have no choice but to treat every claim from these areas as if they lack the proper clinical and pricing support.”
Rosen also said that providers have a different perspective to insurers. “An insurer is sometimes a black hole that receives claims and then fights to pay as little as possible. For payers, the provider is an entity that sees any chance to treat a patient as a license to bill an insurance company with deep pockets for anything and everything it can,” he said. “If each of the parties would become familiar with the people, the inner-workings and even the facilities of the other respective entity, the relationship would cease to work under the veil of anonymity.” When there is anonymity, he said, there is a tendency to act in a more brazen and emboldened manner. “When a relationship exists and there is a real human relationship, a face, a name and memory, people tend to conduct themselves in a more human manner,” he explained.
A solution might be found in creating an initiative within the industry to re- introduce trust amongst all the players. That organisation of providers and payers could jointly agree upon certain guidelines, such as billing practices, claims submission guidelines, clinical expectations, verification of benefits/guarantee of payment language and payment timeframes. “They could create a trusted network of industry players with the imposition of these guidelines as a precondition to working together,” said Rosen.
Of course, it would cost money and time, and require a third party to manage, he said. “MDabroad would be glad to be the arbiter of good faith and put this together!”