‘I Thought I Was In-Network’: The Insurance Scheme That Could Leave New Yorkers With Mountains of Debt

They didn’t know that the company managing her insurance plan, Leading Edge Administrators, has been repeatedly accused of not paying doctors and leaving patients with the bills. They didn’t know that its founder, Jerry Weissman, was found guilty of health insurance-related crimes in 1997 and sentenced to 18 months in prison. And they didn’t know the plan would leave them in five-figure debt by frequently refusing to pay for her treatments and surgeries, even though she receives them at in-network hospitals and clinics.

“I have to live on credit cards,” Hodgson told New York Focus. “I have 70 cents in the bank.”

Hodgson’s massive bills aren’t a freak accident. Rather, they’re the natural result of Leading Edge’s unorthodox business practices, which systematically underpay doctors and shift the costs of care to patients.

Her experience may soon be the norm for thousands of New Yorkers.

On May 1, Leading Edge — which also goes by the name Omni Advantage — became the health insurance provider for hundreds of thousands of New York’s home health care aides. This low-wage workforce, made up overwhelmingly of women and mostly of immigrants, cares for disabled and elderly New Yorkers through the state’s taxpayer-funded Medicaid program.

Leading Edge now offers those care workers an insurance package similar to Hodgson’s in partnership with insurance company Anthem Blue Cross Blue Shield.

The company’s strategy is simple: It promises doctors a certain price, pays only a part of it, and puts the remainder on the patient’s bill.

Six former Leading Edge employees spoke to New York Focus on the condition of anonymity and described the strategy as a “shitty situation,” “very disheartening,” and a “cash cow” for Leading Edge and its corporate clients. They said they frequently saw cases like Hodgson’s.

Hodgson can’t afford to pay for care that insurance won’t cover, so she suffers. Her migraines used to be limited to about half-a-dozen a month, thanks to regular injections she received through her previous insurance. Now, because Leading Edge refuses to cover the shots, she said she gets as many as 18 — sometimes leaving her in the emergency room.

Meanwhile, her unpaid bills have mounted to more than $20,000 — far more than she can afford, even with her wife picking up extra shifts at work.

New York’s home care workers and state legislators are deeply concerned about the transition — and Hodgson’s experience suggests that they’re right to be.

“I think it’s shocking that the Hochul administration would allow taxpayer money to be spent on these scam artists,” said Assemblymember Phara Souffrant Forrest, a Democrat who serves on the health and insurance committees. “The state needs to protect home care workers during this transition and not throw them under the bus.”

Leading Edge, Blue Cross Blue Shield, and Anthem either did not respond to requests for comment, or referred questions to Public Partnerships, LLC, the company that runs New York’s home care program and hired Leading Edge. A PPL spokesperson said the company would not permit many of the practices New York Focus found that Leading Edge has historically employed, but did not say whether those restrictions are in Leading Edge’s contract or how the ban would be enforced.

Since 2006, insurance companies have used MultiPlan when they feel that they are being overcharged by doctors and hospitals. The company makes a software program that generates new prices for medical treatments, which are almost always lower than what the doctors originally charged. The insurance company pays the new, lower price, and leaves the patient to pay the rest.

Unsurprisingly, doctors and patients are not fans of this method. MultiPlan, which recently rebranded as Claritev, has been the target of a deluge of lawsuits alleging that it is part of a “price-fixing conspiracy” to underpay doctors and raise costs for patients. Documents from one suit say the company behaves like a “mafia enforcer.” Its stock price has plunged more than 90 percent in the past five years.

MultiPlan’s software is meant to be used to adjust bills for out-of-network treatment, where there is no pre-existing arrangement between a doctor and an insurance company on prices. But Leading Edge uses it to reprice in-network services, where doctors and insurers have already agreed on a fee.

It’s not clear that MultiPlan considered this use of its product. In a recent report filed with government regulators, MultiPlan says that it provides “out-of-network cost management” and doesn’t mention the possibility of its software being used on in-network bills. The company declined to answer questions from New York Focus for this story.

Christopher Garmon, a health economist at the University of Missouri, said that he’s never heard of MultiPlan being used for in-network claims, and that doing so could leave Leading Edge open to legal action from frustrated doctors.

“If it’s not in the contract that they can do this, then the providers can sue them,” Garmon said.

Leading Edge would use the MultiPlan estimates as often as possible in order to lower the amount the company had to pay out, according to a former employee who worked in the claims department — leaving the patient responsible for paying the remainder.

That’s likely how Hodgson ended up with a $17,106 bill for a surgery to remove tumors from her biceps last October. Her medical providers were in the Blue Cross Blue Shield network that Leading Edge was using, so the procedure should have been covered by her insurance. But Leading Edge said that the surgery’s cost exceeded the maximum benefit they were willing to pay, and only contributed $4,029 of the $21,135 total — leaving Hodgson to pay the rest.

“Why an employer would choose this plan is an open question,” said Loren Adler, who studies health policy at the Brookings Institute think tank. “You have to really not care much about your employees being upset at you.”

“We would just send a standard template saying providers can’t appeal,” the customer service employee said.

Adler from the Brookings Institute said that he’d never heard of such a policy. “There always should be some level of appeal,” he said, in case “someone made a mistake processing the claim.”

If doctors called to complain, Leading Edge would often offer to compromise, but wouldn’t make it easy. “Doctors would negotiate for weeks at a time,” one former employee said.

Frequently, a doctor or hospital would decide that negotiations were a waste of time and try to collect the rest of the bill from the patient. Or patients would simply pay in order to protect their credit score.

“Patients would call in and say, ‘I thought I was in-network,’” one former employee said. “But they would absolutely just pay the bill if they didn’t know what their rights were.”

Sometimes patients would try to appeal. Yet, despite a federal law that requires insurers to respond to appeals within 60 days, Leading Edge could take months or even years to make a decision on whether it was going to pay.

“You have this individual calling back, calling back, calling back,” the former customer service employee said. “And the appeal is just sitting there.”

However, if patients were high up in their companies, their appeals would get preferential treatment, according to another former employee, who worked in operations.

“A CEO’s claim would be paid in full, but an employee who had the same services and the same claim could get denied,” they said. “I would feel really, really bad. I don’t think it’s fair.”

If patients were insistent enough, they could generally get Leading Edge to pay up, former employees said. But every patient who gave up along the way meant profit for Leading Edge.

Across the American health care system, patients only appeal a tiny fraction of claims.

Pushing bills onto patients and doctors weighed on the consciences of some employees.

The former customer service employee said they hyped themself up with pep talks in the parking lot before walking into the office.

“I would have to sit there and be like, ‘You’re here for the dollar. Don’t worry about it. You’re not going to be here long anyway,’” they said. “I had to take anxiety medication.”

The former employee who worked in claims feared they were getting caught up in fraudulent business practices. “Every day, I worried that federal police were going to come in and arrest us.”

“It’s a huge relief. It takes such a weight off my shoulder,” Hodgson said. “We’re not rescued yet, but at least we have something to float on for now.”

This leniency isn’t how Leading Edge has typically treated Hodgson. Beyond refusing to pay her bills, it has often failed to pay her doctors even after promising to do so.

“They’ll say, ‘Oh yes, under your plan, that’s supposed to be paid, that should have been paid,’” Hodgson said. “And then I don’t hear anything.”

Multiple calls to Leading Edge have ended suddenly. “They’re like, ‘Okay, I need to check something.’ And then they hang up,” Hodgson said.

A former employee remembered seeing a similar scene when they first arrived at Leading Edge’s call center, where agents fielded calls from distressed patients.

“Agents were just out there chitchatting, hanging up on providers, telling providers and patients wrong information, and nothing was happening to them” in terms of consequences or discipline, the former employee said. “It was the wild, wild west.”

The question also stumped Garmon, the health economist. “Unless it’s in the contract — and I’ve never seen anything like that — I don’t know why anyone would allow it,” he said.

The two companies’ ties go back decades: When Jerry Weissman, Leading Edge’s founder, was convicted of lying to Congress in 1997, it was due to work he had done as CFO of Empire Blue Cross Blue Shield.

This business model appears to have been profitable for Leading Edge. From humble beginnings in 2010, it has grown to a headcount of over 300, former employees said. And its top brass has been handsomely rewarded.

“They have these new cars, or they’re buying a new house. Meanwhile I’m still trying to afford my first house,” said the former employee who worked in operations.

In a court filing, Northwell called this a “cynical suggestion” that “runs counter to the concept of health insurance.” Empire Blue Cross Blue Shield was “fully aware that … many of the patients would be unable to pay the bill,” Northwell claimed.

The parties settled for an undisclosed amount in January 2023.

The former employees who worked in operations and customer service said that one of the only reliable ways to get Leading Edge to pay up was threatening legal action.

“When they threaten legal, all the alarms go up. And it doesn’t matter what the bill is,” the former customer service employee said.

“I’ve told plenty of members and clients, if you’re not getting a response on these appeals, tell them that you’re going to sue them,” the former operations employee said.