Consumer directed health plans will make all of us better users of the health care system. We’ll shop for price, be careful about what procedures we get from whom for how much how often. We’ll bargain, examine data, and carefully compare providers.
And as a result, we’ll all save a bundle, and the US health care system to boot.
Sort of.
We have a health savings account.
And three teenagers, one of whom has a bad elbow from football/wrestling/snowboarding/lacrosse/not doing his homework. Two months after the initial exam and xrays, and tests for Lyme disease, it is still not straightening out like good elbows should. So, the orthopedist (a very good friend) recommended an MRI, gave us several referral sheets, and off we went to check the provider list and price shop. I called our health insurer, Golden Rule/United Healthcare, who gave me the name of the only par provider in our area. I then asked what the allowable amount would be. They could not tell me, saying that I had to ask the provider what the reimbursable amount would be.
That made no sense. Golden Rule is the largest provider of CDHPs, touting their ability to reduce expenses etc. So their inability to tell me what they would reimburse is puzzling. GR has access to U&C databases, historical data on reimbursement in my area, and an MRI is pretty clear cut from a coding perspective.
As we’re nowhere close to the $5500 deductible (and hopefully won’t be, although with teenagers and my own aging…), I got on the phone and shopped around. Retail prices ranged from $2400 to $875; the par provider offered to cut the retail price to $600 if I paid cash. When I asked the par provider what the allowable amount would be, they couldn’t tell me either. Their billing office said they had no way of knowing what the reimbursement would be.
Neither response makes any sense. Golden Rule has the data, processes these bills all the time, and knows full well what the reimbursable amount is. The provider likely also knows what they get from managed care contracts.
So I’m left with one firm price of $600, and no clue what GR will credit towards our deductible.
And this is for a basic, easily priced, clear cut procedure, for a policyholder who is pretty knowledgeable about the health care system.
Tell me again, how exactly in the brave new world of consumer-directed health care are regular consumers supposed to negotiate the health care system and become better buyers?
It’s clear that insurers have a long way to go on the price (and quality) transparency front. I’m not sure to what extent confidentiality agreements between insurers and providers that prohibit disclosure of actual reimbursement rates are an issue. I recently asked an Aetna executive about this subject, and he said many of the hospitals are still resisting disclosure. At the same time, the senior administrative executive who oversees health benefits for my employer says that insurers are the problem. Numerous insurers have told me that there has been considerable convergence over the last several years in the rates they all pay. If that’s the case and those with the best (lowest) reimbursement rates are those with the leading market share (mainly the Blues), it won’t be easy for insurers with much smaller shares to match them. So why are they afraid of transparency?
Hopefully, if HSA’s continue to expand, there will be more demand for transparency that the industry will find increasingly difficult to resist. Healthy people who get their insurance in the individual underwritten market could make it clear that transparency is something they value highly and are willing to pay for (within reason). At the same time, large, self-insured employers could push for disclosure of actual reimbursement rates even if deductibles are below the HSA minimums. Moreover, Medicare rates should become more easily accessible in a user friendly format, and those should at least serve as a starting point or benchmark to indicate what a given service, test or procedure should cost.
I think there is potentially even greater value for referring doctors (and their staffs) to have price and quality transparency tools at their disposal so they can more easily and consistently steer patients to the most cost-effective providers.
I’ve heard the “confidentiality” argument many times. The thing that doesn’t make sense about that is that as soon as you get an EOB, you find out the exact dollar amounts involved. If EOBs were more obscure, if they only showed the patient amount due, the maybe the confidentiality arguments would hold water, but they’re not. You find out the billed charges, the allowable amount, the amount the insurer paid and the amount the patient owes. It’s transparent, but only after you’ve had the service.
I think from the provider side, they often don’t know what they expected reimbursement is. They just submit claims and take what they’re given, whether it’s the contractually agreed upon amount or not. They rely on the rules systems the insurers use to pay claims. Even if providers have internal rules built into their own systems, there’s often no way to tell what the allowable on a service is until a claim has been created and dropped, only then will the provider system tell you what the allowable is. The whole thing is maddening. There’s so much providers don’t know and insureres won’t say about allowables. Based on what appears on the EOB, there is no good reason for it except laziness.
Like you, I am a health policy expert, but a strong advocate of consumer-directed health care. Also like you, I had a basic medical problem: inguinal hernia, and an HSA and high-deductible health plan. Like you, neither my insurer (California Blue Cross) nor the hospital (California Pacific Medical Center, San Francisco) were willing or able to tell me the cost: not even in a general range. My research indicates that the cost of the day surgery will be around the level of my deductible.
The operation was three weeks ago. I still don’t know how much I’ll owe.
Joe – we’re working on this specific issue of transparency. We’re now moving from being awfully quiet and in alpha mode to a much more publicly accessible phase. A user, can now choose to compare their bills, pmts, and EOBs to other anonymous user’s bills, pmts, EOBs within in any state or health issue.
Yes, it is not perfect yet, and yes, we need a much larger pool of users to increase the value.. but now that we are adding partners like the Multiple Sclerosis society, HSA for America, and so on… we’ll be increasing our pool of comparable community members. Right now, there isn’t a perfect solution, but we’re trying to make a dent in this wall of confusion.
– christopher
founder | ceo
http://www.medbillmanager.com
I used to be a strong proponent of consumer-driven health care, but I’ve changed my mind.
I formerly ran a health care trade association in Illinois and drank the koolaid and signed my family up for a high deductible MSA product.
My wife as well as the Hospital and Provider Office managers were completely unfamiliar with MSAs and wouldn’t negotiate price or budge off billed charges before services were rendered. My wife was pregnant (pregnancy was not covered by the MSA) and the billed charges starting piling up with the hospital and the O.B. refusing to negotiate.
That is until we stumbled upon the magic words that we were self-pay cash patients — at which time the price was rapidly lowered and the office manager gave my wife Medicaid and S-Chip enrollment applications.
My wife was appalled but it was amazing how quick they reduced billed charges.
So I’m not convinced either the provider or the consumer is ready for CDH and haggling over price. My wife and the various office managers were confused and frustrated by the process.
I have been a health insurance broker for over a decade and every day I read more and more “horror” stories that are posted on the internet regarding insurance companies not paying claims, refusing to cover specific illnesses and physician’s not getting reimbursed. Unfortunately, the reality is that insurance companies are driven by profits, not people. If the insurance company can find a legal reason not to pay for something, chances are they will find it, and you, the CONSUMER will suffer. However, what many people fail to realize, is that there are very few “loopholes” in an insurance policy. The majority of the time, when health insurance is purchased, the prospective insured doesn’t even know what kind of coverage the policy is providing, so there is really no need for the insurance company to try to use a “loophole” to get out of paying for something. Any insurance agent will tell you, that the terms of coverage are right in your policy, along with a copy of the application that you signed agreeing to those terms. Most people, as soon as they get their policy, put their insurance cards in their wallet and throw their insurance policy in a drawer or filing cabinet. No one really takes the time to look through their 47-82 page policy. Therefore, since the insurance company is counting on you NOT to read your policy, no “loopholes” are actually needed for the insurance company to get out of paying a claim. Your insurance company will tell you that your policy is a legally binding contract and that you had 10 days to cancel (a 10 day free look period) when you received it, if you weren’t happy with the terms of your coverage.
So do most policy holders really know what is in their 47-82 page health insurance policy? Yes, lots of confusing insurance jargon. Sure, the average policy holder could probably tell you how much their monthly premiums are, but can they tell you what their insurance policy doesn’t cover? Usually the policy holder doesn’t even realize what their policy doesn’t cover until they file a claim and receive a “denial letter” from the insurance company.
Unlike car buying, where the buyer knows that the engine and transmission are standard, and that power windows and cruise control are optional, health insurance is a maze of confusion. Unfortunately, many health plans are purposefully designed to offer “limited” standard benefits. Often, coverage for other medical expenses, like “maternity” and “organ transplant” coverage are optional. Usually a policy holder doesn’t even realize that their policy doesn’t cover something “important” until they undergo medical treatment and then receive a huge bill from the hospital stating that “benefits were denied.”
Yes, we all complain about insurance companies, but we all know that they serve a “necessary evil.” Very few of us could afford to pay for open heart surgery, if we needed it, without insurance. This being the case, how can YOU, the consumer, protect yourself against the big, bad, greedy insurance companies? And, how will you know if you are truly getting the best plan for the lowest price? Simple…buy the type of health insurance plan that you really “NEED.”
Sure, everyone wants to have affordable, quality health insurance coverage, but in my experience, particularly dealing with the small business and self-employed market, very few people individuals can distinguish between the benefits they “want” and the benefits they really “NEED.’
I have read many comments on various blogs about plans that cover 100% (no deductible and no-coinsurance) and I agree that those types of plans have a great “curb appeal.” However, I would not recommend to anyone that they work overtime and give up time with your family just so they could afford a plan with 100% coverage. Do those types of plans offer the policy holder greater peace of mind? Absolutely! But is 100% coverage something that the policy holder really needs? Probably not!
Just like you would do, if you were purchasing options for a new car, you would have to weigh your “wants” vs. your “needs.” For example, although heated seats are a nice optional feature, “Do you really need heated seats if you live in Arizona?” Not unless you are planning to frequently drive to Alaska! So if you are healthy, take no medications and rarely go to the doctor, do you really need a plan with 100% coverage, and a $5 co-payment for prescription drugs? Is it really worth paying for this “option” if it costs you an additional $300 a month in insurance premiums to have this type of coverage?
Or, is it worth $200 more a month to have a $250 deductible and a full drug card vs. an 80/20 plan with a $1,000 deductible and a discount drug card. Wouldn’t the 80/20 plan still offer you adequate coverage? Don’t you think it would be better to put that extra $200 ($2,400 per year) that you would be giving to the insurance company in premiums in your own bank account, just in case, something happens in the future and you have to pay your $1,000 deductible or buy a $12 Amoxicillin prescription? Don’t you think it is wiser to keep your hard-earned money rather than handing it over to the insurance company? Remember, the insurance company offers you NO REFUNDS on insurance premiums if you stay healthy.
In my experience, this is one of the primary reasons that most people I speak to feel like they have been defrauded or “ripped-off” by their insurance company and/or insurance agent. In fact, time and time again I hear almost identical comments from every business owner that I speak to. Comments such as, “I have to run my business; I don’t have to be sick!” “I think I have gone to the doctor two times in the last five years.” “My insurance company keeps raising my rates and I don’t even use my insurance?”
As a business owner myself, I can understand their frustration. Many business owners complain that it is not easy to determine what type of health insurance coverage they really need. So, is there a simple, secret formula that everyone can follow to make health insurance buying easier? Yes! Become an INFORMED Consumer. Every time I contact a prospective client or call one of my client referrals, I ask a handful of specific questions that directly relate to the policy that particular individual currently has in their filing cabinet. You know….the policy that they are relying on to protect them from having to file bankruptcy due to medical debt. The one they bought to cover that $400,000 life-saving organ transplant that they may need someday or those 40 chemotherapy treatments that they may have to undergo on an outpatient basis should they develop lung cancer.
So what happens almost 100% of the time when I ask these individuals “BASIC” questions about their health insurance policy? They have difficulty answer them! The following are 10 questions that I frequently ask a prospective health insurance client. Let’s see how many YOU can answer without looking at your policy.
1. What Insurance Company are you with and what is the name of your plan?
2. What is your deductible?
3. Do you know what your coinsurance percentage is and what dollar amount (stop loss) it is based on? (e.g. 80/20 coverage means you pay 20% of some dollar amount, what is it?)
4. What is your maximum out of pocket expense per year? (e.g. deductibles + coinsurance + other fees)
5. What is the Lifetime maximum benefit the insurance company will pay out if you become seriously ill and does your plan have any “per illness” maximums or caps? (e.g. the plan has a $5 million lifetime maximum, but only pays out $1 million per illness. This means that you would have to develop FIVE separate and unrelated life-threatening illnesses costing $1 million or less to qualify for $5 million of lifetime coverage)
6. Is your plan a schedule plan, in that it only pays a certain amount for a specific list of procedures? (e.g., Mega Life & Health & Midwest National Life, a.k.a. National Association of the Self-Employed NASE)
7. Does your plan have doctor copays and are you limited to a certain number of doctor copay visits per year? (e.g. Can only go to the doctor 2 times a year for a $20 copay?)
9. Does your plan offer outpatient prescription drug coverage and if it does, do you pay a copay for your prescriptions or do you have to meet a separate drug deductible before you receive any benefits?
10. Does your plan have any reduction in benefits for organ transplants and if so, what is maximum the plan will pay if you need an organ transplant? (e.g. Some plans only pay a $100,000 maximum benefit for organ transplants, but the procedure actually costs $250-$400K)
9. Do you have to pay a separate deductible for each hospital admission or for each emergency room visit? (e.g. Some plans have a separate $750 hospital admission fee for each hospital admission which is separate from your deductible. Others have a separate $100 E.R. deductible that may be waived if you are admitted to the hospital.)
10. Are there any restrictions, benefit “caps” or “access fees” on out-patient services, such as, physical therapy, speech therapy, chemotherapy, radiation therapy, etc.? (e.g. Some plans pay a $500 maximum for each out-patient treatment and others require you to pay a $250 “access fee” per treatment. This is usually separate from your plan deductible. So for 40 chemotherapy treatments, you would have to pay 40 x $250 = $10,000)
So how many questions could you answer? If you couldn’t answer all ten questions either, that doesn’t necessarily mean that you are not a smart consumer? It may just mean that you just dealt with a “bad” agent, because a “great” agent would have really taken the time to help you understand your insurance benefits. A “great” asks questions to try to understand your insurance needs and recommends plans based those needs. A “great” agent takes the time to explain the difference to you regarding “needs” and “wants” and gives you enough information to weigh all of your options so you can make an informed purchasing decision. A “great” agent looks out for YOUR best interest and NOT the interest of the insurance company.
So how do you know if you have a “great” agent? If you can answer all of the above questions without looking at your health insurance policy, you have a “great” agent. If you can answer the majority, you may have a “good” agent. If you can only answer a few, you, most likely, have a “bad” agent. Just like any other profession, there are insurance agents that really care about the clients they work with, and there are others that avoid your questions and duck your calls when you leave messages about your unpaid claims or your skyrocketing health insurance rates.
Remember, purchasing health insurance is just as important as purchasing a house or a car, if not more important. Ask your agent a lot of questions and make sure that the answers that s/he provides are thoroughly explained to you. If you don’t feel comfortable with the coverage, price, etc. ask your agent if you can see another plan so you can make a side by side comparison before you buy. Additionally, read the “fine print” in your health plan brochure and policy and ask your agent what every asterisk (*) next to the benefit description really means.
Furthermore, do your own due diligence. For example, if you research MEGA Life and Health, a.k.a. Midwest National Life a.k.a. National Association for the Self Employed (N.A.S.E), you will find that there have been 14 class action lawsuits brought against them since 1995. So ask yourself, “Is this a company I would trust to pay my insurance claims?
Furthermore, ask your agent if s/he is a “captive” agent or an insurance “broker.”
“Captive” agents can only offer ONE insurance company’s products.“Independent” agents or insurance “brokers” can offer you a variety of different insurance plans from many different companies. These plans can often be customize to meet your specific insurance needs and budget.
Health insurance is probably one of the only things that I would not recommend buying off of the internet. In my opinion, there are too many variables to consider. A health insurance purchase requires the level of personal attention that only an insurance professional can provide. So use Ebay and Amazon for your less important purchases and use a knowledgeable, ethical and reputable insurance agent or broker for the most important purchase you will ever make….your health insurance policy.
Lastly, if you have concerns about an insurance company or agent, contact your state’s Department of Insurance BEFORE you buy your policy. Your state’s Department of Insurance can tell you if there have been any complaints filed by policy holders against that insurance company and the reason for the complaints. If you suspect that your agent is trying to sell you a fraudulent insurance policy, (e.g. you have to join an association to qualify for health insurance, you have to become a member of a union, you have to become part of a group or a professional association) you should contact your state’s Department of Insurance to check to see if you agent is licensed and to verify that the insurance policy and insurance company are registered in your state.
In closing, I hope I have given you enough information so you can become an INFORMED consumer. However, I remain convinced that the following words of wisdom still go along way:
1. “If it sounds too good to be true, it probably is!”
2. “If you only buy on price, you get what you pay for.”
C. Steven Tucker
Licensed Insurance Agent
Small Business Insurance Services, Inc.
“The Best Policy Is A Great Agent”
http://www.smallbusinessinsuranceservices.com
Call Toll Free: (866) SBIS123 (724-7123)
“Based on what appears on the EOB, there is no good reason for it except laziness.”Posted by: BC
It is not that simple. Providers are constantly spending their resources trying to get paid on claims that are denied or underpaid for no reason. That is the low hanging fruit. Reimbursement methodoligies are so convoluted it takes a statitician to figure out what you are suppose to be getting paid. But this is all part of the insurance conspiricy.
“If the insurance company can find a legal reason not to pay for something, chances are they will find it, and you, the CONSUMER will suffer” C. Steven Tucker
The underlying problem with the system lies in the above statement, however, with one correction, the word legal should be removed. Insurance companies contantly ignore the law when it comes to reimbursement. It is so widespread that physicians just take it for granted.
I just wanted to make a post to maybe explain a couple of things or at least give some perspective on some of the issues I have seen posted on this site.
First off, yes I do work for 1 of the major health insurance companies. I work in a call center answering customer calls about benefits/coverage and claims. I have only been with the company for a few months, but I was already very familiar with the health insurance industry prior because of various issues with prior insurance coverage.
The first thing I would like to address is, EMPLOYER GROUP POLICIES. Many people call in and get upset with the insurance company when they find out something’s not covered, or there’s specific guidelines for that particular health service. If your employer has what’s known as an ASO or Self Funded policy, THEN THEY CHOOSE WHAT TYPE OF COVERAGE THE MEMBERS HAVE, NOT THE INSURANCE COMPANY! We (the ins co.) don’t decide that you can’t see a dr. that’s not a contracted physician w/us, YOUR EMPLOYER CHOSE NOT TO HAVE OUT OF NETWORK (OON) BENEFITS. They sit down and write out the policy with what they want to pay for and how much they want to “cover”. They have the right to change the policy from year to year and if they change what your coinsurance percentage is, please don’t blame the insurance company.
2nd, there are certain things, like what people can use their Flexible Spending Account (FSA) to pay for, that the ins co doesn’t control. FSA’s are governed by THE IRS and they decide what is FSA eligible and what is not.
And, last but not least, the Health Care Professionals. If a dr. signs a contract with an ins co then they agree to accept a specific rate for each type of services they offer/provide. They also know how they are supposed to bill for those procedures, so when a claim comes in with incorrect billing or coding, then yeah, the ins co is going to deny it, but they’re going to let the provider (dr.) know why. Also these providers KNOW THAT THEY ARE NOT ALLOWED TO BALANCE BILL A MEMBER, BUT THEY STILL DO! AND THEY WILL SEND MEMBERS TO COLLECTIONS FOR THESE AMOUNTS THAT THEY ARE NOT ALLOWED TO BILL FOR! THEY AGREED TO ACCEPT A CONTRACTED RATE AND ANYTHING OVER THE CONTRACTED RATE THAT’S BILLED, THEY HAVE TO WRITE OFF. There’s also the Timely Filing limit that they know about as well. They will tell a member that they sent in a claim and the ins co didn’t pay anything or that they sent in the claim w/in the alloted timeframe but we’re not paying on it, so the patient has to pay for everything. IF A PROVIDERS OFFICE DOES NOT SUBMIT THE CLAIM WITHIN THE TIMELY FILING LIMIT, THEN THEY CANNOT BILL THE MEMBER FOR THAT VISIT/SERVICE,
And last but not least, yes, we make mistakes. Sometimes when a claim is processed it’s done incorrectly and we will be more than happy to correct our error, but if noone calls in to let us know it’s wrong, we aren’t going to know. And if members have other insurance, or if members have Full Time Student dependents on their policy, they have to call in at least once a year and update that information so that claims aren’t going to be denied or held up because we need that information.
AGAIN, I OPENLY ADMIT, THAT YES WE AS HUMAN BEINGS MAKE MISTAKES, but not all of the bad feelings about ins co’s are being fairly directed. I know that when someone calls in to talk about their health insurance that they need to be treated with respect, dignity, intelligence and honesty. And sometimes when they get a rep in a call center, we don’t have all the answers, but if we’re given the chance, we’re more than willing to find out the correct answer for the member. I take pride in my job and the way I treat customers that call in and I know how frustrating it is to be transferred around from person to person, but if it’s being done so that the caller gets the most qualified person to answer their question, then we’re doing the right thing, RIGHT?
Stephanie
So…my finances and son having suffered from United Healthcare’s crap of refusing a claim (there was a referral to a physician and then they refused to pay for the doctor’s appointment). Why the hell do we pay for health insurance? Honestly? Why do we pay you health insurance if you’re not going to help us. SCREW YOU ALL!