Late one Saturday evening, Federico Tarling – who works as Chief Service Officer for Assist Card in Argentina – gets a distressed call from a client travelling in Mexico. The client tells Tarling that a third-party billing agent is chasing them for payment related to their family member’s treatment at a local hospital, threatening to transfer the patient to a public facility over the weekend should they fail to send across a sum of US$150,000. 

This is not the first correspondence that Tarling has had about this case. Tarling had previously spoken to the insured’s family, who had explained that after having already exhausted two coverages available through the patient’s credit cards (amounting to over $200,000), the client hoped to secure the additional $150,000 funding that the billing agent was asking for through the patient’s cover with Assist Card (which, coincidentally, was the insured’s maximum coverage available with the travel insurer). Tarling had also already called up the billing agent directly on the Friday to arrange payment of $50,000. This was instead of the full $150,000, as the firm would not accept a guarantee of payment (GOP) to enable the patient in question to stay at the Mexican hospital over the weekend. After the interim payment agreement was reached, Tarling says it was agreed that Assist Card and the billing agent could resume discussions on the Monday. However, following the client’s urgent call on Saturday evening, Tarling jumped on the phone to the billing agent, and, he says, subsequently had no choice but to arrange a further $100,000 to be transferred to the company to ensure the patient’s continued care over the weekend.

Upon paying the agent the money on the Monday (and having exhausted the insured’s full coverage), Tarling notes that Assist Card received a summary of charges (‘though no bill or proper receipt’, he adds), which listed that Assist Card was being charged over $9,000 per day for the ICU bed – an expense that two years prior had cost $1,300 per day, and was considerably hefty, even considering the cost of Covid-19 protective measures that the hospital would have put in place; it was a price increase of seven times compared to the two years prior. 

And it didn’t end there either. Tarling recounts that the family was still required to cover additional costs after this, themselves, even when more than $400,000 had already been collected by the billing agent and, to top it all off, Tarling says, the patient was transferred to a public hospital in the end anyway, with no proper medical notes to assist a smooth transition (and appropriate care) to the receiving hospital.

Expensive rates for US-based negotiators

Sadly, this situation is one that some travel insurance and assistance providers have come to know all too well. For those that aren’t familiar with the issues of patient assistance in Mexico, it only takes one loaded Google search, or a quick glance at Mexico’s international travel health entry on the US Department of State – Bureau of Consular affairs website[1], which brandishes phrases such as ‘exorbitant prices’ and ‘inflexible collection measures’, to get an idea of the levels of abusive billing practices present in the country’s healthcare system. 

When it comes specifically to billing, some healthcare providers in Mexico prefer to employ third-party billing agents to arrange settlement of the bill with payors. And this, it seems, is a point of contention for many international insurers and assistance providers. 

Guillaume Debaene, General Manager of Mega Assistance Services (Mega), tells Hospitals & Healthcare that his company is ‘well aware that all the main big private hospitals in the Riviera Maya (Cancun, playa del Carmen, Tulum) use these third-party billing agencies to turn their invoices into the American format and to inflate the claims’. “It’s a well-established system, and hospitals have no incentive to change that,” he said. 

Could delayed payments be an originating cause for the use of third-party billing agents by hospitals in Mexico?

Robin Ingle, who has lengthy experience working with myriad providers across Mexico, Caribbean and LATAM, noted that while his companies (Ingle International Inc. and UK-based World Wide Special Risks Limited) don’t often encounter issues with billing (thanks to a contracting process that negotiates prices ahead of time with a network of providers), from time to time, he says, they ‘do see challenges with out-of-network providers – mainly in tourist areas of Mexico, Costa Rica and the Dominican Republic’. “There are always a couple of providers in these areas who charge far more than others, and employ abusive billing practices, as they know they are dealing with travellers and insurance companies whose point of reference may be the US for healthcare rates and may know little about local pricing and practices,” he said, adding that some of these providers use third-party billers located in the US, which is part of the reason their invoices are so high: “They charge based on US rates.” Ingle adds that issues with US-based negotiators buying bills in Mexico and LATAM and then up-charging the bill still exist; on occasions, these firms will split the increase with the contracted healthcare facility. “This process can see bills increased by 100 to 200 per cent,” Ingle said.

GMMI, Inc.’s Business Development Consultant Dolores Armenta also confirmed that, on occasion, the US-based cost containment and medical case management company has encountered challenges with a selection of providers, most of which are facilities in the coastal regions of Mexico, and a select few others in LATAM. “These are facilities, sometimes physician groups, who have their billing/revenue cycle managed by intermediaries/third-party billing companies, many of which are US-based,” Armenta said, adding that, in some cases, these third-party billing agents often bill at higher rates than some of the most expensive centres in the US.

And Daniel Scognamiglio, Partner at UK-based law firm Blake Morgan, told Hospitals & Healthcare that he has plenty of experience acting for a number of travel insurers who have reported increasing costs from Mexican hospitals in the years running up to the pandemic, and he recounts a specific incident, involving a third-party billing agent, in which his client’s insured complained of excessive treatment for a sore throat whilst on holiday in Mexico. “The hospital claimed a little more than an astonishing $1.4 million for the treatment. They also tried to pressure the insurer with threatening correspondence sent to the insured, that we also had to address,” Scognamiglio said. “Needless to say that nothing like this amount was paid. Had the insured been treated correctly (probably repatriated in this case), and the insurer invoiced appropriately, then there would have been no need for lawyers to become involved.”

International fees for international insurers

Clearly there’s an issue here. Debaene recounts his own personal dealing with a third-party billing agent for a private hospital in a popular Mexican tourist destination. He inferred that once the medical facility knew that an international insurer was involved, they immediately got a third-party billing agency involved, and the costs subsequently skyrocketed. “At the end, the final charge (after discount) was 240,000 pesos (around US$12,000), three times more than what the hospital advertises,” he said, adding that he believed that if his insurers had provided his party the funds to pay the hospital upfront, they would have been billed at the regular price.

Debaene noted that, in this specific case, he was told that international insurance providers were also charged an ‘international fee’: “When I asked this third party why they applied a higher rate for an international insurer, they said because they don’t pay as fast as the domestic insurances.” He continued: “In our case, the payment was made 50 days after the date of service.”

a number of travel insurers have been reporting increasing costs from Mexican hospitals in the years running up to the pandemic

A foot in the door

When asked why third-party billing agents are so often required for international medical insurance payments to hospitals in the tourist areas in Mexico, GMMI's Soraia Arroyo Lynch, Director of Business Development & Client Accounts, replied that the use of third-party billing agencies could be the result of hiring international hospital management firms for hospital support/administration. In addition, she says, facilities who choose to outsource their billing and collections to third-party billing agents may well benefit from these vendors buying their debt up front, and collecting from international payers at the back end, proving legal resources to pursue international debt. “Which we all know can be challenging,” she said. What’s more, US-based billing entities will also know the international payers well (supposing a considerable majority of travellers will also be coming from the US) and oftentimes have the legal and other resources to pursue the debt, Lynch added.

Tourist destinations in Mexico – an expensive affair

Could delayed payments be an originating cause for the use of third-party billing agents by hospitals in Mexico? On the GOV.UK website, it certainly advises travellers to be aware that not all hospitals in Mexico will agree to deal directly with medical insurance companies. “You should be prepared to pay for treatment yourself up front and then seek a refund,” the website reads[2]. And this could easily hark back to issues with currency conversion and delayed payments. Hospitals in tourist hotspots no doubt see an enormous turnover of patients throughout the year and, as Global Excel LATAM’s Healthcare Risk Management Director Jorge Rodriguez notes, ‘many familiar tourist areas are known for higher healthcare prices due to the costs of medical supplies, equipment, and pharmaceuticals that need to be imported’. Rodriguez added that the use of collection agencies for international bills can also further increase costs.

The terrible trouble with inflation

Armenta of GMMI reasons that issues with bad practices in health insurance and healthcare are not exclusive to Mexico or LATAM, ‘they exist where economic interests outweigh ethical values’. In Mexico, as Debaene explains, the Mexican peso is not as stable as the euro, for example, and so the exchange rate that providers apply can sometimes be ‘surprising’. “Because it costs more money for a provider to receive US dollars than Mexican pesos, that is often reflected in the bill,” he said. As such, Debaene notes that Mega makes a point to partner with private hospitals that bill in Mexican pesos, not in US dollars.

providers fear not being paid on time, or at all, by international payers, while international payers tend not to trust the local providers and their claims

Rodriguez, meanwhile, is quick to draw attention to the issue of inflation in the region, which he says is 30- to 150-per-cent higher than the general consumer index due to local currency volatility and depreciation. He says that this is ‘among the key challenges with global payments in Mexico and across South America’. Armenta further expounds this. She says that, according to the Mexican Association of Insurance Institutions, in recent years, the growth of private healthcare inflation has been higher than general inflation in Mexico. Indeed, it is estimated that during this year, it will rise even higher, with a 16-per-cent increase. “These figures, however, would reflect medical inflation for the local market,” she said. She added: “In addition to such inflation, what we tend to see with a select few providers in Mexico is a trend for egregious billing practices and unpredictably high charges assessed on claims for international patients.” 

Navigating a complex healthcare landscape

Further to her previous points, Armenta reasons that in Mexico, there is little information on the quality and price breakdowns of private services that allow insurers or third-party payers to take a step towards better management and purchase of services for their policyholders or clients. “The way in which the hospital bill is presented, the coding, and the name of medical expenses in Mexico are not uniform, making its analysis and interpretation complex and confusing, on many occasions.” She continued: “Additionally, in Mexico, in the private health sector, there is no obligation to adhere to medical practice guidelines, which can lead to overuse and abuse of medical costs. In addition to this, there is no access to information on patient management that allows [us] to assess the quality of care.”

Armenta adds that there are also ‘unscrupulous doctors and hospitals’ that report false information about the procedures performed, medical expenses incurred, medical history, when the medical care was provided, and to whom. “Pro-actively medically managing patients’ admissions can help prevent and curb this trend,” she told Hospitals & Healthcare.

Covid-19 and medical billing issues in Mexico

Furthermore, Covid has had a considerable impact on healthcare provision and costs. Armenta commented: “The global financial crisis caused by the pandemic has led to currency depreciation in many parts of the world, and in some countries more than others (i.e. Brazil, Mexico), thus providing some relief when issuing payments in Mexican pesos, Brazilian real, etc. versus the US dollar or the euro. Conversely, these currency devaluations have significantly affected the cost of imported medical devices and hospital supplies.” 

Moreover, as Ingle reasons, LATAM and Mexico have been incredibly hard hit by the pandemic. “We have also seen major disruptions in countries that were heavily dependent on a high level of travel and tourism for their economic wellbeing. The disruptions are caused directly by the economic fallout of Covid, which has caused them to implement measures to manage the effects on their citizens, by borrowing money, stretching healthcare services, pleading with overworked, underpaid healthcare staff, and increasing security because of increased crime and social unrest.” Ingle adds that due to economic issues, large populations, poorer socioeconomic populations, rural populations, and great distances combined with a lack of vaccine manufacturing in LATAM, Mexico (and LATAM) will take longer to recover from the pandemic. “This will affect travel and travellers to the region in many different ways for at least the next five years.”

Rebuilding trust

So what’s the solution? It’s not an easy one to crack. As Armenta noted: “The problem tends to arise when there is no insurer/assistance/third-party activation during the care, and a bill shows up at or post-discharge.” 

issues with US-based negotiators buying bills in Mexico and LATAM and then up-charging the bill still exist; on occasions, these firms will split the increase with the contracted healthcare facility

If, as Robin Ingle highlights, insurers are able to negotiate prices ahead of time with a network of providers, then they will largely be able to mitigate the issue; but, for the remaining out-of-network providers to which some patients are steered (as highlighted by the US Department of State – Bureau of Consular Affairs website[3]), these are unlikely to agree to a GOP with an insurer with which they have no partnership (as was the case in Tarling’s example).

Debaene highlights that providers fear not being paid on time, or at all, by international payers, while international payers tend not to trust the local providers and their claims; and this culture of mistrust breeds the perfect conditions for the establishment of third-party billing agencies, who, in an ideal world, can take the responsibility of administering bills away from hospitals, and clarify these bills for insurers. But the reality of the situation in some of these more extreme cases presented by our contributors is that having a middleman only anonymises the process further, with the opportunity for clear communication, itemised billing, and cost containment through medical management, falling by the wayside.

So it seems that the best, short-term solution is to establish better direct relationships with local providers in these tourist destinations. It might not be an easy feat, but if it means that insurers can set up GOPs in advance of care and have immediate access to patient medical information, it’s certainly going to help with controlling those costs. And as Debaene pointed it, it’s important to help build a relationship of trust, which can be helped with the support of local agents, he says. Ingle agrees with this too. “In the end, everyone wants to be paid, on time and at a fair rate,” he told Hospitals & Healthcare. “The patient wants no problems, and they want good medical care. Do not be arrogant, threatening or fearful, if there are problems; local negotiators can be hired to assist in a one-to-one meeting with the provider/negotiator.”

What’s more, local agents also help with any language communication issues, which Rodriguez from Global Excel says is ‘crucial’: “Our team members are fluent in local languages and have found that it ensures information is properly exchanged, not only with admissions and treatments, but also with bill reviews, negotiations and medical second opinions.”

In light of everything that has happened over the last year, Ingle insists that communication is key: “Sometimes a coffee, a drink, a discussion of family or common interests can bring parties together. Especially during the trauma of the pandemic and its aftershocks.”

Elsewhere, the worldwide experience of Covid-19 may effect some good in terms of standards of care in Mexico. As cited by Rodriguez, improved healthcare standards and regulations that have come about in the past year, as well as the increased dependence on remote, digital healthcare solutions, could help balance out some of the healthcare and health insurance issues in the region. “Once travel reopens across the region, we expect that technology and health regulations will combine to create a sense of security across Latin America,” Rodriguez said.

For now, unfortunately, problems persist. But the mere action of keeping the narrative open on these issues will allow the international travel insurance and assistance industry to identify and address exactly where and why the problems occur, and, with enough determination, overcome them. ■